The number of UK companies developing plans to tackle climate change has increased significantly in the past year, according to a new report by Aviva.

Almost half (44%) of UK companies now have a structured plan in place to reduce their carbon footprint and climate impact, up from 34% one year ago, reflecting increasing concern among businesses about the impact of climate change. Two thirds of UK businesses are now concerned about the climate (compared to 54% a year ago) and believe that organisations should reduce their carbon footprint.

The findings of Aviva’s latest annual climate-ready index suggest UK businesses appear to be responding to increasing pressure from customers and other businesses to address climate change. Nearly half (45%) of businesses now feel consumer pressure to act on climate, up from 30% a year ago, and 39% feel pressure from other businesses to put climate plans in place, up from 27% in 2022.

According to the report, the most popular action businesses are taking are energy-saving measures (48%) such as turning off lights, increased use of renewable energy such as solar power and ground source heat pumps, and greater waste recycling (54%).

However, the effects of the current economic environment are impacting on future plans, with 42% of businesses pausing investment in cutting their carbon footprint and 56% of UK businesses viewing the cost of reducing their carbon impact as currently unaffordable.

Aviva’s report also highlights a mixed picture for the UK’s overall progress in adapting to and mitigating climate change. It warns that after years of being seen as a leader in climate action, the UK’s position in climate change mitigation is starting to slip. The recent dilution in government net zero commitments means meeting future targets is an even bigger challenge and creates uncertainty.

The report argues that the UK’s international leadership in tackling climate change may be at risk as the government increasingly focuses on short-term energy security over long-term sustainability. Amanda Blanc, group CEO at Aviva, said: “I am worried that UK climate action has stalled this year, according to our analysis. The UK’s ambitious climate goals are under threat due to a lack of practical and detailed plans. This puts at clear risk the jobs, growth and the additional investment the UK requires to become more climate ready.

“Despite this, we can see UK businesses trying to address the climate challenge in greater numbers and putting action plans in place. To support them, we urgently need a UK, whole economy, transition plan which allows us to compete more effectively with the US Inflation Reduction Act and help the UK become the most climate-ready major economy by 2030.”

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