A significant retreat from ambitious climate commitments is underway across the UK economy, threatening the nation's legally-binding drive to reach net zero carbon emissions by 2050. The political consensus that once underpinned Britain's world-leading climate legislation has fractured, while major corporations from retail to finance are prioritising short-term shareholder returns over long-term environmental action.
Political Winds Shift Against Green Targets
The foundational political agreement on climate action has eroded considerably. The Conservative party, under leader Kemi Badenoch, officially abandoned net zero by 2050 as a core policy earlier this year. Meanwhile, the rise of Nigel Farage's Reform UK party has further disrupted the cross-party alignment that enabled the UK to become the first major economy to enshrine its net zero commitment into law back in 2019. Even the Labour party faced pressure, forced to defend its own green policies following criticism from former Prime Minister Tony Blair.
Key Industries Backtrack on Commitments
This political uncertainty has provided cover for a widespread corporate U-turn. The trend has accelerated in the year since Donald Trump's return to the White House, with his pro-fossil fuel agenda emboldening sceptics.
Transport Sector Slows Its Electric Transition
The automotive industry's bold post-pandemic promises have largely evaporated. Disappointing growth in electric vehicle (EV) sales through 2024 led to intense and successful lobbying for weaker regulations in the UK, EU, and US. The UK government eased its Zero-Emission Vehicle (ZEV) mandate in April, introducing loopholes for hybrid sales. The EU similarly climbed down, announcing that 10% of carmakers' sales could still be petrol or diesel after 2035.
In the US, Trump dismantled EV subsidies and relaxed emissions rules. Ford's response was stark: a $19.5 billion write-down and the scrapping of several EV models. The aviation sector shows even less progress. Airbus delayed its zero-emission hydrogen plane target to 2035, and supplies of Sustainable Aviation Fuel (SAF) remain negligible. The UK government further undermined aviation targets by approving expansion plans for Gatwick and Luton airports and backing a third runway at Heathrow.
Energy Giants Refocus on Fossil Fuels
Europe's oil majors have publicly pivoted. BP's recently ousted CEO, Murray Auchincloss, admitted the company's optimism in the energy transition was "misplaced" and promised a strategic reset towards oil and gas—a direction his successor is expected to continue. Shell plans to increase oil and gas production while halving its green spending. The green energy sector also suffered a blow when Danish firm Ørsted cancelled the massive Hornsea 4 offshore windfarm project off the Yorkshire coast.
Finance and Retail Scale Back Ambitions
The financial sector's retreat has been highly visible. The UN-backed Net-Zero Banking Alliance (NZBA) effectively collapsed in October 2024 after departures by major banks including JP Morgan, Citigroup, Goldman Sachs, Barclays, and HSBC. HSBC delayed key climate goals by 20 years and watered down environmental targets in its CEO's bonus plan. Investment giants Vanguard and BlackRock left the Net Zero Asset Managers initiative amid political pressure.
In retail, rising costs are triggering delays. Supermarket chain Morrisons pushed its net zero target back by 15 years, from 2035 to 2050. The British Retail Consortium's latest assessment found only 38% of top suppliers have committed to net zero, with most industry emissions coming from complex supply chains.
Local Councils Become a Political Battleground
Net zero has become a frontline issue in local government. While over 300 councils declared climate emergencies and 90% set net zero targets, Reform UK's growing control is reversing this. In Reform-led areas, commitments are being rolled back aggressively. Lincolnshire's mayor, Andrea Jenkyns, vowed to block all renewables projects, threatening 12,000 jobs. Staffordshire, Durham, Kent, Derbyshire, and West Northamptonshire councils have all rescinded climate emergency declarations, disbanded committees, or scrapped green schemes like heat pump installations.
However, the Green party, with nearly as many councillors as Reform, is pushing in the opposite direction within the 14 councils it leads, aiming to "go faster and harder" on climate action.
A Global Contrast and an Uncertain Future
This widespread retreat creates a stark contrast with the global picture. According to the International Energy Agency, global investment in clean energy now stands at $2 trillion annually—double the investment in fossil fuels. China, notably, has continued its renewable power march, with green generation surpassing coal this year.
The UK's path is now fraught with uncertainty. While the Labour party maintains ambitions for a virtually carbon-free electricity system by 2030 and upholds the net zero target, the combined force of political fragmentation, corporate backtracking, and local policy reversals poses a severe threat to the nation's climate goals. The consequence of this faltering drive, as evidenced by the stalled transitions in transport, energy, and finance, could be devastating for both the UK's economic future and the global climate.
