According to analysis by CBI Economics, the consultancy arm of the Confederation of British Industry (CBI), the UK net zero economy has grown by 10.1% since 2023 and now generates £83.1bn in gross value added. The segment currently comprises around 22,800 businesses, which garnered total revenue of £28.8bn last year – just over half the size of the economy of Northern Ireland.

These were the headline figures of a CBI Economics report, The Future is Green: The Economic Opportunities Brought by the UK’s Net Zero Economy, produced earlier this year for the Energy & Climate Intelligence Unit.

In November, CBI Chief Economist Louise Hellem will appear at ICAEW’s Sustainability Summit – a two-day online event – to talk about this research. Ahead of the Summit, Hellem spoke about how the UK net zero sector has flourished into a genuine powerhouse.

Reviving communities

In Hellem’s assessment, the segment has what it takes to play a key role in helping the UK to meet its growth ambitions. Previous CBI research estimated that, by 2030, the net-zero economy could boost GDP by £60bn if it continues to attract investment, pursue export opportunities in areas such as offshore wind and deploy novel, green technologies effectively.

“The Future is Green shows that a lot of those benefits are already being generated,” she says. “The segment directly employs more than 270,000 people – more than the telecoms sector – and through the supply chain supports a further 950,000 jobs. On average, those jobs are 40% more productive than in other sectors and are very well paid, with an average salary of £44,500. That’s really exciting.”

Furthermore, the segment is reviving coastal areas that have been left behind by other types of growth – in particular benefiting communities in Scotland, the North East, the West Midlands and the Yorkshire and Humber region.

For Hellem, based on their current performance, three areas of the net zero economy show strong potential for future growth:

• clean power systems, including floating wind turbines and small, modular reactors;
• industrial decarbonisation such as carbon capture, utilisation and storage clusters; and
• the green digital economy comprising software innovations linked to grid connections and predictive maintenance, plus artificial intelligence (AI) for energy optimisation.

Rewiring the UK

With an Autumn Budget on the horizon, Hellem has thoughts on which specific areas policymakers should focus on to boost the net zero segment’s prospects.

Energy infrastructure: “One of our big Budget asks is for the government to reduce the long connection lags that businesses often face,” she says. “We essentially need to rewire the UK to take advantage of domestic renewable energy generation and ensure it goes to the areas where it’s most needed.”

Energy costs: “Particularly if we compare with our closest EU neighbours, the UK is internationally uncompetitive on energy pricing. While the government has announced the British Industrial Competitiveness Scheme to support some businesses, we must ensure that targeted measures are in place to help more firms across the economy reduce their energy costs as electrification progresses.”

Transition funding: “We must ensure that the UK as a whole has a viable and investible transition plan. That means thinking about how to scale solutions such as blended finance and having more certainty around the UK project pipeline – including mid-market projects. Standardised contracts could help reduce transition costs.”

In tandem, Hellem notes, policymakers must ensure that the right skills frameworks are in place across all those areas – including provisions for reskilling.

Building on her third point, Hellem stresses that credible transition planning is also a vital asset for individual businesses to position themselves for success in the net zero era. “Do you have the right KPIs, and are they linked to your financing strategy?” she asks. “Could you de-risk some of your energy supply – for example, through on-site generation? Plus, think about how to achieve operational quick wins through process optimisation, such as using AI to better understand where energy use is happening in your business.”

Moral imperative

Against that backdrop, Hellem notes the accounting profession will need to keep pace. “Reporting requirements are changing quite rapidly,” she says. “So, there’s an important opportunity at hand for the profession to improve decision-useful reporting, provide clear, comparable transition disclosures and think about where assurance is most needed.”

On an individual level, accountants must build their own capacity, she says, particularly in areas such as climate transition accounting. They should also think about how to integrate climate-specific risks into audit and advisory.

Additionally, she says, professional bodies such as ICAEW – together with CBI – have a duty to provide policymakers with feedback and guidance to ensure reporting burdens are kept to reasonable levels.

However, Hellem warns, companies must ensure that they are not consumed by reporting as an end in itself. “Leaders must think carefully about their motivations for doing this, and the resulting signals,” she says. “Over the past few years, we’ve seen people recognise that net zero brings tangible benefits that make you far more attractive to invest in – and that’s fed into a lot of board decisions. As such, net zero is being viewed in a strategic way and filtering down into everyday decision-making. That’s certainly preferable to companies leaning on reporting as a tick-box exercise.”

So, what would Hellem say to a die-hard sceptic who questions the potential of the net zero economy?

“The benefits are not hypothetical,” she stresses. “Net zero is providing UK Plc with genuinely strong export opportunities and supporting hundreds of thousands of jobs. On a wider level, it’s strengthening national security by helping us ensure that the UK has more extensive sources of domestic power generation. And that’s all while helping us to answer the moral imperative on the climate side.”

Toby Roxburgh, ICAEW Sustainability Manager, Nature and Biodiversity, will host a panel discussion with Hellem as part of the Sustainability Summit. “The UK net zero economy is not just an environmental imperative, but a powerful engine for national growth and resilience,” he says. “As the research from CBI Economics has shown, the opportunities for innovation, investment and job creation are immense. I’m looking forward to exploring these themes further at the summit – where we’ll dive deeper into how finance professionals can help accelerate this transition.”