• New insights on UK adaptation risks bring climate governance to the fore: In October, the Environment Agency (EA) reported that around 6.3 million homes and businesses in England are at risk of flooding, with Guardian analysis suggesting that some towns may have to be abandoned as areas become uninsurable against climate change. Following the hottest UK summer on record, a report from the Green Finance Institute (GFI) finds that the degradation of nature in the UK will cut UK GDP by nearly 5%, “if the private sector does not make a greater effort to halt the decline.” Bringing into focus the legal risks businesses face if this ambition is not ramped up, the UK’s largest environmental lawsuit was launched in October, with almost 4,000 people bringing a legal claim against major poultry producers and a water company over alleged “extensive and widespread pollution” in three UK rivers. Aims to drill down into the deliverability of nature-aligned climate action was reflected in the UK’s presence at COP30, “the Implementation COP”, where Prime Minister Sir Keir Starmer and Energy Secretary Ed Miliband assured the international community of the UK’s commitment to climate engagement, technical expertise, and multilateral partnership. For board directors, these developments underscore the need to actively oversee climate and nature-related risks, ensuring the integration of adaptation, regulatory, and litigation considerations into strategic decision-making.
• The Autumn Budget’s mixed signals of support for climate measures highlight need for business leadership in sustaining the UK’s green growth momentum: UK Chancellor, Rachel Reeves, delivered the 2025 Autumn Budget at the end of November. Announcements included the North Sea Future Plan, stating the intention to maintain existing oil and gas fields for their lifetime and reconfirming the commitment to not issue any new licenses to explore new fields alongside a new North Sea Job Service to support oil and gas workers transition to clean energy sectors; increased funding for electric vehicles and EV charging, alongside a new pay-per-mile tax on EV and PHEV drivers; agreement to not include indirect emissions within the scope of Carbon Border Adjustment Mechanism (CBAM) legislation; and commitments to regulatory reform to enable nuclear energy rollout. Boards should assess how evolving budgetary priorities are likely to shape financing conditions, sector-specific incentives, and opportunities to align investment pipelines with public sector spending.
• New Carbon Budget and Growth Delivery Plan signals a more detailed and cohesive framework for the UK’s long-term decarbonisation transition: The UK government published the Carbon Budget and Growth Delivery Plan (CBGDP) on 29 October, setting out how it will meet its statutory Carbon Budgets 4 (which covers 2023-2027) to 6 (2033-2037) in line with the Climate Change Act 2008. The CBGDP consolidates over 300 policies and proposals across key sectors including power, industry, transport, heat, and land use, bringing together a vision of carbon budgets’ role in unlocking the benefits of the clean energy transition. This follows a Climate Change Committee letter to the UK government in October, which found that the UK’s adaptation objectives are not on-track to limit emissions to 1.5°C, heightening the need to more explicitly make the connection between the UK’s adaptation and emissions reductions. A revised carbon budget plan offers boards firmer ground on which to assess capital allocation decisions, future workforce needs, and policy dependencies that may influence transition pacing and cost.
• Energy and infrastructure decisions highlight both momentum and growing strains across the wider energy system: The UK government’s manifesto commitments of speeding up timelines for nationally significant energy projects has seen progress, with the approval of the UK’s largest solar farm in September. A major UK-US partnership on advancing nuclear energy has been announced, reflecting renewed momentum behind long-term energy security and economic resilience. Yet, persistent pressures of grid connection delays, rapidly rising energy demand linked to AI growth, and the ongoing skills gap continue to impact the UK’s decarbonisation progress. In response to the skills gap, Energy Secretary, Ed Miliband, announced the Clean Energy Jobs Plan in October, which aims to create 400,000 green energy jobs as part of a major national skills drive. The Plan seeks to double the number of people working in green industries by 2030, with a focus on improving measures to ensure companies receive public grants and contracts needed to create clean energy jobs. Boards should consider how these risks and signals may impact their businesses’ resilience outlook, skills strategy, procurement planning, and assessment of future energy exposure.
• Transition planning and reporting reforms highlight the business community’s continuing calls for consistency across regimes: Reporting has seen a number of developments this quarter. A UK government consultation on Climate-related transition plan requirements closed in September, marking a step towards a more structured regime for UK-regulated financial institutions and FTSE100 companies transition planning. The UK’s ambition to scale up its commitments comes as the International Transition Plan Network (ITPN) published a number of new resources in October and November including a new interactive map of Global Transition Plan Requirements, a discussion paper on Sector Transition Plans, and summary report on Private Sector Transition Plans. Despite growing industry-wide investment in transition planning, decisions on changes to CSRD and CSDDD under EU Omnibus made in November 2025, proposed a reduction in sustainability reporting and due diligence obligations – an effort which has faced resistance from industry leaders. On 16 December 2025, the European Parliament and EU Member States approved a provisional agreement on the Omnibus I simplification package, marking one of the last steps towards final adoption. The agreement awaits a formal approval from the Council of the European Union before it can enter into force. Monitoring potential divergence between UK and EU reporting regimes is critical for UK boards, in order to understand how reporting practices are likely to evolve.

• Biodiversity Beyond National Jurisdiction Bill: The Biodiversity Beyond National Jurisdiction Bill is scheduled to begin its second reading in the House of Lords in December. The landmark bill is set to ratify the Biodiversity Beyond National Jurisdiction (BBNJ) Agreement – often referred to as the High Seas Treaty – which aims to protect two-thirds of the world’s ocean.
• Second round of UK carbon storage licensing: The North Sea Transition Authority (NSTA) has opened the UK’s second carbon storage licensing round, offering 14 locations in Scottish and English waters for exploration and appraisal. The closing date for applications is 24 March 2026.

• Greenhouse Gas Protocol – Scope 2 emissions: The Greenhouse Gas Protocol is conducting a review of its guidelines on how corporations measure emissions from purchased or acquired electricity, steam, heat and cooling (called “scope 2 emissions”) to improve the credibility of renewable energy claims. Any changes will be taken into account by the Science Based Targets Initiative (SBTi) and could impact how organisations calculate and report on these emissions. The consultation on strengthening these Scope 2 guidelines has now been extended to 31 January 2026.
• Managing the future of UK oil and gas: The Energy Security and Net Zero Committee has also published a consultation on managing the future of UK oil and gas, particularly as it relates to supporting the jobs transition in industrial communities. The consultation runs until 7 January 2026.
• British Industrial Competitiveness Scheme: The Department for Business and Trade has launched a consultation on the new British Industrial Competitiveness Scheme (BICS), which aims to reduce electricity costs for manufacturing businesses within the UK Industrial Strategy’s growth sectors. The consultation is open until 19 January 2026.
• Regulators and growth: The Industry and Regulators Committee has published an inquiry on Regulators and growth, welcoming views on the relationship between regulators and economic growth, and how this supports investment and innovation. The inquiry closes on 9 January 2026.
• FCA ESG rating rules: The Financial Conduct Authority (FCA) published proposals on ESG ratings at the start of December, outlining plans to introduce improved transparency and governance rules. The FCA is now running a consultation on its proposed regulatory approach until 31 March 2026. Final rules are expected in Q4 2026 and will come into effect in June 2028.
• International Climate Policy: The Energy Security and Net Zero Committee is running a consultation on the UK’s International climate policy, building on momentum set at COP30. The deadline for submissions is 7 January 2026.
• UK international climate finance: The UK government’s International Development Committee launched an inquiry at the start of December to examine how well the UK’s current international climate finance (ICF) spending is supporting low-income countries in responding to climate change. The UK government is currently preparing to make a new ICF commitment covering 2026-2030. The inquiry’s deadline for submissions of evidence is 12 January 2026.

• CCC letter on adaptation: In October, the Climate Change Committee (CCC) published a letter to the UK government in response to its request for advice on strengthening the UK’s adaptation scenarios. In its letter, the CCC cautions that the UK should be prepared to cope with weather extremes as a result of at least 2°C of global warming by 2050. Chairwoman of the CCC’s Adaptation Committee, Baroness Brown, explained “Adaptation in the UK is not keeping up with the increase in climate risk. The impacts on the UK are getting worse and [the government] needs more ambition.” This follows confirmation from the Met Office in August that Summer 2025 was the UK’s hottest on record, with research from Imperial College London finding that at least 1,147 died from climate-driven heat in UK this summer. The CCC is expected to provide further analysis of the potential trade-offs to the UK government’s adaptation objectives in its May 2026 Well-Adapted UK report.
• Consultation on Seventh Carbon Budget: An Environmental Audit Committee inquiry to examine the CCC’s advice on the Seventh Carbon Budget (CB7) closed in early November. Findings are set to inform the UK government’s official CB7 strategy for the years 2038-2042, providing greater clarity on the policy trajectory for emissions reductions and how this will impact the UK public. The new chairman of the CCC, Nigel Topping, was appointed in September, vowing, “I want to make sure that we, the Climate Change Committee, play our role in continuing that broad consensus, with the details being hotly contested, but not the broad trajectory.”
• Report on climate crisis’s threat to UK’s national security: The Institute of Public Policy Research (IPPR) released a report in October, The security blind spot: Cascading climate impacts and tipping points threaten national security, that calls for climate change to be a core part of national security planning. The IPPR calls for the UK government to undertake a rapid national security risk assessment of climate change, “to establish a full picture of the security consequences of climate change.”
• Environmental Improvement Plan: In December, the Department for Environment, Food & Rural Affairs (Defra) published its revised Environmental Improvement Plan (EIP) for England, setting out – “for the first time” – five-year delivery plans structured around 10 goals to restore nature, supported by statutory Environment Act 2021 targets. The new EIP includes updated interim targets spanning air quality, water, terrestrial and marine biodiversity, and resource efficiency and waste reduction. Key elements from the Plan include:
• Stronger interim targets to restore or create a total of 250,000 hectares of various wildlife-rich habitats (outside protected sites) by December 2030, in line with the UK government’s manifesto. This will be backed by £500 million in funding for the Landscape Recovery scheme.
• First-ever plan to reduce ‘forever chemicals’ (PFAS) risks to health and environment, with revised interim targets to reduce exposure to PM2.5 particles by nearly a third by 2030 (compared to 2018 levels). As part of this effort, the UK government has committed to a consultation on introducing stricter emission limits for certain heating devices, such as wood-burning stoves.
• A commitment to stronger penalties for waste crime, including a review of the rules around spreading sewage leakage to agricultural land and a digital waste tracking service to modernise record keeping (which is already being tested in a private beta).
• An Environmental Indicator Framework (EIF), consisting of 66 indicators that describe environmental change in relation to each of the 10 goals of the EIP. The framework supports the statutory cycle of monitoring established by the Environment Act.
• UK climate progress statistics: The Office for National Statistics (ONS) published its annual review of UK progress on environment, climate and nature, Beyond GDP insights – environment, climate and nature, in November. Headline findings include that UK residence-based emissions intensity fell by 64% between the first and second quarter of 2025; just over half of adults (51%) in the UK report climate change and the environment as an important issue, compared to 69% in July-August 2023; and nearly three-quarters (74%) of UK adults report having been affected by climate change (by heatwaves, strong winds, drought) in the last 12 months.
• Landmark study on public support for net zero: In September, Climate Outreach and More in Common released Britain Talks Climate & Nature, a “landmark study of more than 7,000 people” across the UK which offers in-depth analysis of how people in the UK think and feel about climate and nature, as well as recommendations for policymakers. The analysis finds that 74% of participants feel that climate change is an important issue, and that almost three times as many people think net zero is good (48%) than bad (16%) for the UK. CEO Survey: A global survey of over 1,300 CEOs published in October found that a growing number of chief executives are confident in their firms’ ability to achieve net zero goals. The findings also suggest that two-thirds of CEOs claim to have fully embedded sustainability into their business as critical to long-term success.
• Report on FTSE 250 decarbonisation: Published in December 2025, FTSE 250 Climate Report: The Credibility Gap finds that increased disclosure and climate pledges from FTSE 250 firms is “yet to translate into real-world decarbonisation.” In 2024, companies within the FTSE 250 emitted at least 295 million tonnes of CO₂ Analysis highlights that while 86% of operational companies in FTSE 250 have set net zero pledges, capital allocation companies – which represent 48% of the index and collectively manage £967 billion in assets – have been operating with limited validation frameworks for their climate commitments. Lord Redesdale stated that despite “some great improvements on measurement, reporting and targeting over the past three years, […] operational emissions reductions (measured by intensity metrics) are not happening fast enough to deliver legislative net-zero compliance,” urging “all members of this market index to overcome the barriers and do more and at a quicker pace."
• Energy bills concerns: The UK government’s net zero levies are expected to be the main driver of household energy bills next year. According to analysis from Cornwall Insight, rising charges to operate and maintain the UK’s electricity transmission network mean that households face an extra £30 on their energy bills from April 2026. Principal Consultant at Cornwall Insight, Dr Craig Lowrey explained, “People rightly expect renewables to bring bills down, and they will. But first, we need to lay the foundations. There are a lot of costs involved in the transition, but the costs of doing nothing will be far greater.”
• NHS progress: The NHS published a progress report in September, outlining commitments over the past five years to delivering its greener NHS strategy. Since becoming the world’s first healthcare system to commit to becoming net zero in 2020, NHS Carbon Footprint emissions have decreased by 14%, and over 68% since 1990. The report finds that the NHS remains on track to meet its interim target of an 80% reduction in direct emissions by 2032.
• Industry response to opposition parties’ climate proposals: In October, the Confederation of British Industry (CBI) published a response to ongoing debates around opposition political parties’ proposed scrapping of the Climate Change Act, stating, “The Climate Act has been the bedrock for investment flowing into the UK and shows that decarbonisation and economic growth are not a zero-sum game. Businesses delivering the energy transition added £83bn to the economy last year alone, providing high-paying jobs to almost a million people across the UK. The UK’s climate governance and the cross-party consensus that has underpinned it has shaped long-term contracts to deliver renewable energy, investment in green technologies and our international leadership in decarbonisation.”

• On 29 October, DESNZ published the Carbon Budget and Growth Delivery Plan (CBGDP), setting out how the UK government will meet its statutory Carbon Budgets 4 (which covers 2023-2027) to 6 (2033-2037) in line with the Climate Change Act 2008. The CBGDP consolidates over 300 policies and proposals across key sectors including power, industry, transport, heat, and land use. A number of other resources have been published in parallel, including:
  • The UK government’s response to the Climate Change Committee (CCC)’s 2025 Progress Report in Reducing Emissions, identifying plans to respond to the CCC’s 43 recommendations.
  • A first-ever dedicated Investor Prospectus, recognising the role of targeted public finance and supportive policy in accelerating private investment flows.
  • The UK’s Methane Action Plan, which reaffirms the government’s commitment to the Global Methane Pledge, targeting a 30% reduction in global methane levels by 2030 (based on 2020 levels).
• This is the third draft of the CBGDP, after the previous two delivery plans were successfully challenged in court for not containing sufficient policies to deliver the emissions reductions required by law under the Climate Change Act 2008 and obligated under the Paris Agreement.
• This is the third draft of the CBGDP, after the previous two delivery plans were successfully challenged in court for not containing sufficient policies to deliver the emissions reductions required by law under the Climate Change Act 2008 and obligated under the Paris Agreement.
• The CBGDP forecasts significant investment in low-carbon job creation, with an estimated three hundred thousand direct jobs by 2030 across the onshore electricity network and up to fifty-five thousand jobs supported by increase in storage and consumer led flexibility. As part of this, from April 2026, the UK government will introduce new skills short courses funded through the Growth and Skills Levy.
• The UK’s climate oversight body, the Climate Change Committee (CCC), is set to fully assess the CBGDP in its annual progress report in June 2026.

• Chancellor Rachel Reeves delivered the 2025 Autumn Budget on 26 November. Industry reactions to this year’s fiscal announcements say they offer a mixed picture on climate policy. Climate-related measures in the Budget include:
  • Commitments to bring down regulatory barriers and grow the UK’s nuclear energy sector.
  • Introduction of the Electric Vehicle Excise Duty (eVED), a pay-per-mile charge on EVs and PHEVs.
  • The removal of indirect emissions from the scope of forthcoming UK Carbon Border Adjustment Mechanism (CBAM) legislation.
  • Increased funding for the Warm Homes Plan and commitments to bring down household energy bills through the removal of green levies.

More detail on the 2025 Budget’s climate takeaways is provided in Chapter Zero UK’s post-Budget update.

• COP30 took place in Belém, Brazil from 11-21 November 2025, bringing nearly 200 nations together to explore pathways to bridging the global climate ambition-implementation gap, and advancing adaptation finance efforts. Speaking at the negotiations, UK Prime Minister, Sir Keir Starmer, stated that “the UK is ‘all in’ on net zero” and “committed to win-win green policies.” Similarly, Energy Secretary, Ed Miliband, insisted the summit represented a “’step forward” despite ending without a formal deal for fossil fuel phaseout.

Further analysis of COP30 outcomes is provided in Chapter Zero UK’s Spotlight: COP30: contribution or conversation? as well as the Climate Governance Initiative’s Post-COP30 briefing.

• PRI pre-COP30 event: The week before COP30 negotiations began, over 1,000 investors, policymakers, and sustainability leaders from 51 countries came together at the Principles for Responsible Investment (PRI)’s flagship event – PRI in Person 2025 – bringing institutional investors “front and center into the COP30 process”. PRI’s key insights from the discussions include:
  • A focus on how the Global Asset Owner community can leverage its unique strengths to support long term value creation and increased transparency, with the Global Asset Owner Forum calling for collective vision and routes to policy engagement.
  • A policy briefing, Unlocking and Mainstreaming Institutional Investment Flows, outlining recommendations to better map investor types and enabling regulation; champion blended finance and sustainability-linked bonds; and align NDCs with credible investment plans.
  • A session with UNEP Finance Initiative and MSCI Institute highlighting that banks embedding Principles for Responsible Banking (PRB) in business practices are outperforming peers on both ESG and financial metrics, with 61% of PRB signatories rated as ESG leaders compared to 23% for non-PRB banks.
  • AI-driven approaches to integrating nature and climate risks into portfolios remain a key opportunity area.

• Wind generation record: In December, the UK surpassed the maximum wind generation record, producing enough wind to power over 23 million homes across the country (28,825MW). At the time, wind was providing 4% of the UK’s electricity. Chief Operating Officer at the National Energy System Operator (NESO), Kayte O’Neill, stated, “It’s hard to believe how far Britain has come on its clean power journey over the past quarter of a century, with renewables now producing around 60% of our electricity – up from just 3% in the year 2000.”
• NESO projects pipeline: In December, NESO confirmed a new pipeline of priority projects to drive progress towards the UK government’s Clean Power 2030 target. NESO claims that it has the potential to unlock £40 billion of investment a year, through the removal of so-called ‘zombie projects’. Chris Stark, Head of Mission Control for Clean Power 2030, stated “The energy projects our country needs now have the green light to deploy at a pace we haven’t seen for decades.”
• Ofgem investment: Also in December, the Office of Gas and Electricity Markets (Ofgem) confirmed £28 billion in investment to maintain, upgrade, and expand the capacity of the UK’s energy grid – committing £17.8 billion for the gas network and £10.3 billion in electricity funding. As part of this five-year investment plan, Ofgem has approved updated delivery plans for three major “electricity superhighways”, providing links for offshore and onshore power which could save UK consumers up to £6 billion in savings. This £28 billion commitment is expected to rise to an estimated £90 billion by 2031 across both gas and electricity networks. While savings are expected in the long term, household energy bills are expected to raise by £108 by 2031 to help fund this investment.
• Approvals for major solar farm: In October, the UK government approved the Tillbridge Solar Farm, which is projected to provide enough clean energy to power 7.5 million homes and could support 1,250 jobs. The project marks the seventeenth nationally significant clean energy project approved since July 2024.
• Future Energy Networks letter: UK trade group, Future Energy Networks (FEN), sent a letter to Energy Secretary Ed Miliband in September, raising concerns around a surge in gas network connection requests from data centres amidst increasing AI demands – with 86 enquiries received in the last year alone. FEN, which represents National Gas, claims that the surge in interest in gas was due to “uncertainty and bottlenecks” which can lead to 15-year wait times to connect to the electricity grid. The UK government has taken steps to address these risks by designating data centres as critical national infrastructure, as further detailed in a November research briefing, Data centres: planning policy, sustainability, and resilience. The briefing echoes concerns around the sustainability of the UK’s data centres, considering the sector’s electricity consumption is expected to rise four-fold by 2030.
• UK-US nuclear deal: The UK signed a major new multi-billion-pound deal with the USA in September to “turbocharge the build-out of new nuclear power stations” as part of the Atlantic Partnership for Advanced Nuclear Energy. The partnership is set to develop 12 advanced modular reactors in Hartlepool. In response to the news, nuclear industry leaders urged that “UK firms should ‘be bold’ and step into the sector, as global demand for nuclear technology continues to ramp up.”
• Ban on fracking in England: In October, Energy Secretary, Ed Miliband, stated plans to pass a new law that would ban fracking for shale gas permanently in England. A range of concerns have been raised about fracking including risk to landscapes, water supply, and of earthquakes caused by underground extraction. Currently only limited by a suspension on ministerial decisions to grant licences, the proposed ban would replace this temporary halt with a firm statutory prohibition. A timeline for the legislation “will be set out in due course.”
• Calls for UK ‘energy security bank’: Proposals for a windfall tax on big banks to fund home loans to install renewable energy systems were announced in September. The proposed policy looks to create a new ‘Energy Security Bank’ to offer loans of up to £20,000 for households not currently covered by government grants for low incomes or major infrastructure projects. The implementation of these proposed loans is projected to lower the average household’s energy bills by about £500 a year.
• Offshore oil and gas decommissioning consultation: The UK’s Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) published a consultation on decommissioning rules for offshore oil and gas installations, which ran until 14 November. UK North Sea operators are required to prevent marine pollution in the decommission of disused assets, in compliance with the OSPAR Convention Agreement which regulates activities in the North-East Atlantic sea. New OPRED guidance aims to reduce the number of offshore assets left in the North Sea, with an official outcome of the consultation not yet available.
• Offshore wind funding: In its latest budget updates for Allocation Round 7 of the Contracts for Difference auction, DESNZ confirmed that £1.08 billion in funding for delivering offshore wind farms would be made available between 2028 and 2031. RenewableUK reaction stated that the budget “should be adjusted to maximise the amount of vital clean energy capacity the UK can secure,” considering that it is currently only set to procure a quarter of eligible offshore wind capacity.
• New contract for Drax: In November, UK-based biomass energy giant Drax signed an agreement with the Low Carbon Contracts Company (LCCC), a UK government-owned company, for subsidies to cover the operation of its biomass power station from 2027. The agreement included enhanced biomass sustainability requirements, to ensure that all biomass used at the power station is sustainably sourced and verified. In the weeks prior to the agreement, Drax agreed to acquire three ready-to-build battery energy storage system (BESS) projects for over £150 million, with Drax Group chief executive, Will Gardner, explaining “
  • Drax has faced scrutiny over its sustainability commitments, with November research from Stand.earth’s Forest Eye initiative criticising Drax’s alleged sourcing of whole old-growth trees for power generation across its sites.

• New ITPN resources: The International Transition Plan Network (ITPN) launched a number of new resources in October and November including:
  • A new interactive map of Global Transition Plan Requirements, helping to track the regulatory status of mandatory, upcoming, and voluntary climate transition plan requirements. This follows the first global ITPN Dialogue in September, where policymakers, regulators, investors and firms stressed the importance of shared global norms and disclosure standards for transition plans.
  • A discussion paper, Sector Transition Plan: A bridge between national ambition and company transition plans, which provides a shared pathway and benchmarks for how sector-level transition plans can link national net zero goals to credible company-level transition plans. A summary of the paper is also available.
  • A summary report for policymakers and regulators, Private Sector Transition Plan: A critical tool for mobilising finance, which sets out five mechanisms through which transition plans help to mobilise finance, case study examples, evidence gaps, and policy recommendations. A summary of the report is also available.
• SBTi Corporate Net-Zero Standard: In November, the Science-based Targets Initiative (SBTi) released a second draft of its revised Corporate Net-Zero Standard (V2) for a second public consultation, which ran until 12 December 2025. SBTi has also published an explanatory note, How to use the SBTI Corporate Net-Zero Standard Version 2, which offers further information on how the revised draft interacts with other SBTi standards.
• SBTi net zero poll: SBTi has released the results of a survey of 171 companies, finding that the number of firms with net zero goals has tripled over the past 18 months, and that 91% of firms report overall positive impacts from setting targets including strategic cohesions, stakeholder confidence, financial performance, and climate impact.
• FCA ESG rating rules: The FCA, the UK’s conduct regulator for financial services firms and financial markets, published new proposed transparency, governance and conflict of interest management requirements for ESG ratings providers in December. The new requirements, which are estimated to bring at least £500 million in net benefits over the next decade, follow finalisation of new legislation in October by the UK government to regulate ESG ratings providers (under the supervision of the FCA). The law applies to UK-based providers, as well as foreign providers offering ESG ratings in the UK. The FCA has launched a consultation on the proposed rules, which is open until 31 March 2026. Following consultation, the FCA plans to finalise rules in Q4 2026, and for the new requirements to come into effect from June 2028.
• EU Omnibus updates: On 9 December 2025, the European Parliament and Council’s presidency reached a provisional agreement on the Omnibus package for sustainability reporting and due diligence, known as Omnibus I. The terms outlined include:
  • CSRD: companies in scope: 1,000+ employees and over €450 million net turnover; exemption for financial holding undertakings.
  • CSDDD: companies in scope: 5,000+ employees and €1.5 billion; risk-based approach to identifying and addressing impacts in the value chain; maximum non-compliance fines of 3% of global net turnover.  Omnibus proposals have faced scrutiny from sustainability business leaders, with a group of 475 businesses and investors calling for the EU to uphold strong sustainability rules and prevent a weakening of competitiveness and investor confidence, as set out in a September Corporate Leaders Group statement. On 16 December 2025, the European Parliament and EU Member States approved a provisional agreement on the Omnibus I simplification package. The agreement was adopted with 428 votes in favour, 218 against, and 17 abstentions. The agreement awaits a formal approval from the Council of the European Union before it can enter into force. Timelines suggest that proposed amendments to CSDDD will enter into force for companies in July 2028, with full application in July 2029. Companies scheduled to report under CSRD 2026 (for FY 2025) must now report in 2028 (for FY 2027).

• Transition plans consultation: A DESNZ consultation on Climate-related transition plan requirements closed in September. Whilst an official outcome has not yet been published, a number of industry perspectives have been shared:
  • A response from one of the UK’s main pension fund bodies, Pensions UK, set out that a “perceived lack of coordination across government departments on transition play policy” is causing confusion amongst pension schemes, but that the adoption of the TPT framework “would help avoid the confusion,” as well as the establishment of a cross-departmental taskforce for transition plans policy.
  • In its response, the Association of Chartered Certified Accountants (ACCA) published a call to action to the UK government to set practical guidelines for the mandatory climate transition plans for financial institutions and FTSE 100 companies. ACCA Strategy and Governance Executive Director, Maggie McGhee, stated, “To be effective, these requirements should strike a balance: encouraging meaningful organisational change without imposing disproportionate administrative burdens, particularly where the costs of compliance may outweigh the benefits.”
• WBCSD Transition Plan Guide: The World Business Council for Sustainable Development released A Practical Guide on Transition Plan Dependencies in September, providing a seven-step framework for companies to map critical value chain risks and dependencies, in order to integrate these into transition planning. The guidance includes company examples and practical tools for immediate implementation.
• Sector Transition Plans: In October, the Net Zero Council (NZC) launched Sector Transition Plans (STPs), new guidance on developing STPs in partnership between government, business, and civil society. The Broadway Initiative, secretariat for the Net Zero Council, launched a three-year collaboration programme in October to support the implementation of STPs. The Transition Finance Council has released a corresponding research report, Sector transition plans: The Finance Playbook, providing a sector-agnostic framework for ensuring plans are financeable.
• Better Business Standard: The Better Business Network (BBN) launched the Better Business Standard in September, introducing a UK accreditation framework to help businesses demonstrate and improve their social and environmental impact. Initially introduced by B Lab in April 2025, certification is currently available exclusively to BBN members who are able to provide evidence of their impact across seven pillars: governance and transparency; people and culture; climate and environment; nature and biodiversity; community and social impact; customers, trust and accessibility; and growth and innovation.

• Clean Energy Jobs Plan: On 19 October, the Energy Secretary, Ed Miliband, announced the Clean Energy Jobs Plan, which aims to create 400,000 green energy jobs as part of a major national skills drive. The Plan seeks to double the number of people working in green industries by 2030, with a focus on improving measures to ensure companies receive public grants and contracts needed to create clean energy jobs. Additional efforts will focus on transitioning experienced professionals from the oil and gas sector, supported by up to £20 million in joint funding from the UK and Scottish governments. Across the Plan, a total of 31 skilled trades are prioritised.
• Critical Minerals Strategy: On 22 November, the UK government published its Vision 2035: Critical Minerals Strategy, designed to reduce dependence on foreign suppliers by 2035 – with targets to source 10% of domestic demand from UK production and 20% from recycling. Currently, the UK produces 6% of its critical mineral demand domestically, while demand projections continue to grow – e.g. lithium demand is expected to surge by 1,100% by 2035. As part of the strategy’s £50 million in new funding, UK Export Finance (UKEF) announced the Critical Goods Export Development Guarantee, providing UK-based businesses supplying critical mineral products access to high-value finance to secure long-term import contracts and/or invest in domestic capacity-building. CEO of Critical Minerals Association, Kirsty Benham, commented, “Critical minerals are fundamental to the UK’s transition to clean energy, and underpin high-growth sectors like advanced manufacturing and digital technology. UKEF’s new critical goods guarantee will be able to support companies to make the long-term investments needed to de-risk supply chains for critical minerals.”
• In November, members of trade body, UK Steel, published a report, calling on the Government to “quickly unlock the full economic and environmental potential” of the UK’s steel scrap. The UK currently produces approximately 10 million tonnes of steel scrap annually, of which more than 80% is currently exported. Chair of UK Steel’s Circular Steel Sub-Committee, Jacob Hayler, stated, “The U.K.’s steel scrap resource is one of our greatest industrial assets, but the policy framework that drives the market has not kept pace with the shift to low-CO₂production […] The U.K. has the scrap, the skills and the ambition to be a global leader in circular steel;  what we need now is coordinated policy leadership to align with national climate, industrial and competitiveness objectives."
• R&D funding boost: At the end of October, the Department for Science, Innovation and Technology (DISIT) confirmed a £55 billion R&D funding boost to unlock UK breakthroughs from health to clean energy. This “largest-ever investment in R&D” has been framed as a critical component of the UK government’s Plan for Change, in acknowledgement that “businesses grow faster because of public R&D. In the 6 years after receiving their first R&D grant funding, employment increases in the average business by 21% and turnover grows by 23% relative to similar firms who didn’t get support.”
• Modelling on long-term financial benefits of investment in wind power: A UCL study released in October found that from 2010 to 2023, wind power delivered a net benefit of £104.3 billion to UK consumers. The authors of the report argued, “Reframing UK government support as a high-return national investment rather than a subsidy would be more accurate and effective.”

• UK ETS extension: On 4 December, the UK government confirmed that it will extend the UK Emissions Trading Scheme (UK ETS) into a second phase, as of 1 January 2031. Launched in 2021, Phase II of UK ETS will run for 10 years from January 2031 to December 2040. The UK ETS Authority also published its response to the Future Markets Policy consultation, confirming a higher “inflation-proof auction reserve price” (ARP) – the minimum price at which allowances are sold at auction. The UK ETS authority confirms that “changes reflect policy the Authority considers proportionate to make at this stage to support an effective standalone market while negotiations to link the UK and EU ETS are ongoing.”
• New NSTA carbon storage licensing round: The North Sea Transition Authority (NSTA) launched the UK’s second carbon storage licensing round in December. A total of 14 locations in Scottish and English waters have been opened for exploration and appraisal applications, with the potential to provide up to 2 gigatonnes of additional CO₂ storage capacity. The UK’s first carbon storage licensing round in September 2023 saw 21 carbon storage licences awarded. NSTA stated, “The projects, funded from the UK’s government’s commitment of up £21.7 billion, could contribute around £5 billion per year of gross value to the UK economy by 2050 and create 50,000 jobs long-term. It is important that momentum is maintained. The Climate Change Committee concluded that there was no viable path to net zero by 2050 without carbon storage.” The closing date for applications is 24 March 2026.
• Linking EU-UK carbon markets: In November, EU countries unanimously agreed to begin talks with the UK government on linking the EU and UK carbon markets. Backed by both European and UK industries, a key upside to the link would be avoiding the EU’s carbon border levy, which the UK government has said would cost UK companies around £800 million annually. On 17 December 2025, EU Climate Commissioner Wopke Hoekstra announced that Britain would not be exempted from the carbon border levy until its carbon market was linked to the EU’s – a process that is expected to take several years. The EU CBAM will start imposing fees on the bloc's imports of goods including steel and cement from January. But companies have until a September 2027 deadline to buy CBAM certificates to cover their 2026 emissions and submit them to the EU. Whilst no comment was provided following the announcement, the UK government has stated it is prepared to align some UK financial rules with those of the EU in order to ensure the deal goes ahead.
• e the deal goes ahead.
  • The UK announced in November that it would adopt the EU’s free allocation benchmarks from 2028 onwards. Free allocation is the practice of distributing emission allowances to specific industries, typically those at high risk of carbon leakage, without requiring them to purchase them.
• In November, Business Green reported that two-thirds of sustainability professionals trust recognised voluntary carbon market (VCM) standards. While confidence is growing, the analysis also showed that 46% of professionals believe that clearer policy is needed to effectively scale the market.

• Delays to net zero shipping tax talks: In October, despite Prime Minister Sir Keir Starmer’s backing of proposals from the UN’s International Maritime Organisation (IMO), talks of introducing a global net zero tax on shipping stalled. Under the IMO's proposed net zero framework, the shipping sector would face progressively tougher carbon intensity requirements for marine fuels from 2028 to 2035, with ships facing fines up to £360 for every tonne of CO₂ they emit. The proposal also sought to establish a carbon credit market, allowing more efficient shipping operators to sell credits to higher emitters. The IMO has since delayed its decision on implementing the framework by a year.
• Heathrow expansion progress: The Department for Transport (DfT) reached a decision in late November on which scheme it will take forward in the Airports National Policy Statement (ANPS) review, as part of Heathrow Airport’s £49 billion third runway expansion. The chosen scheme, the Heathrow Airport Limited (HAL) scheme, proposed a north-west third runway expansion, which requires major works to the M25 motorway. Transport Secretary, Heidi Alexander, responded to the news: “Today is another important step to enable a third runway and build on these benefits, setting the direction for the remainder of our work to get the policy framework in place for airport expansion.”
  • The CCC confirmed in September that it had yet to receive a formal request from the UK government to assess how Heathrow expansion plans would impact on carbon emissions targets of reaching net zero by 2050. Upon the announcement of the chosen scheme on 25 November, the Transport Secretary published a letter to the Climate Change Committee, setting out DfT’s intentions to engage with the CCC during the ANPS review process to ensure airport expansion “can be made consistent with our net zero framework.” A statement on the UK government’s stakeholder engagement approach was also published.
  • In December, the London Assembly Environment Committee raised “deep concerns” about the environmental impact of the proposed Heathrow expansion in a letter to the Transport Secretary, calling for the Airports National Policy Statement to include targets for noise impacts, restrictions on additional air quality impacts, and progressively tighter standards to lower emissions over time.
• EV charging transition risks: The UK’s charging industry body, ChargeUK, released a report in September, Delivering affordable charging for all, in which it argues that the sharp increase in charging network operators’ underlying energy costs (both wholesale energy and fixed charges) is the leading cause of the average charging price increase for UK EV users. To combat this, ChargeUK outlines a three-point plan for enabling more affordable charging:
  • Accelerating regulatory reforms to bring down the cost of standing charges;
  • Extending policy levy exemptions for the charging sector;
  • Adding EV charging to the Renewable Transport Fuel Obligation (RTFO) scheme, which would help generate operator revenues to support infrastructure deployment and price competitiveness.

The report also calls for the VAT penalty on public charging to be brought down in line with home charging – from 20% currently to 5%. Authors of the report stated, “High energy prices, rising network charges and the higher rate of VAT on public charging compared with plugging in at home ultimately means that drivers are paying the price. Unless these cost pressures are tackled by UK government, we risk turning a good news story into a barrier for millions of drivers who want to go electric.”

• Gatwick Airport expansion: In September, the Secretary of State for Transport, Heidi Alexander, approved plans for a second runway at London Gatwick Airport, as part of a £2.2 billion privately-financed project. The proposed expansion is projected to increase capacity by 30 million more passengers a year at the UK’s second-biggest airport, adding 1,000 more departure flights. In September, the CCC confirmed that it had not been asked to provide advice on any future expansion. The campaign group, Communities Against Gatwick Noise Emissions, launched a legal challenge against the decision in October. 
• Record sales of zero emission HGVs: It was reported in November that the sale of zero emission heavy goods vehicles (HGVs) quadrupled year-on-year, achieving a new record volume. The news reinforces the UK’s position as Europe’s second largest zero emission HGV market by volume.

• UK’s biggest-ever environmental lawsuit: The UK’s largest environmental lawsuit was launched in October, with almost 4,000 people bringing a legal claim against major poultry producers and a water company over alleged “extensive and widespread pollution” in the Wye, Lugg, and Usk rivers. This case is likely to be followed closely by corporate stakeholders considering, “The implications of this lawsuit could resonate beyond the immediate parties involved, influencing both current environmental policies and future corporate governance frameworks. The outcome may ultimately shape corporate accountability and set new standards for environmental responsibility within the industry.” Previously in March 2025, a £1 million fund was announced by the Welsh and UK governments to investigate pollution sources in the River Wye.
• Trial against UK diesel car manufacturers: A trial against some of the world’s largest carmakers began in October 2025, with about 6 million UK claimants suing for compensation for manipulating diesel emissions tests. Car manufacturers are accused of using unlawful “defeat devices” between 2012 and 2017 to cheat emissions tests. A judgement is expected in mid-2026.
  • London’s High Court has previously ruled against Volkswagen (VW) in a similar 2020 case, although VW settled those claims without any admission of liability in 2022.
• Greenpeace’s legal warning to the Crown Estate: In October, Greenpeace UK warned the Crown Estate that it is considering legal action “unless the public body stops ‘monopoly profiteering’ at the expense of bill payers and offshore wind developers.” The campaign group calls for a review of how the Crown Estate manages the seabed and its process for auctioning seabed leases, arguing that the current system “risks loading unnecessary costs onto energy bills twice: through higher option fees and through incentivising wind farms in Scotland, where fees are capped.” The Crown Estate’s rights to the seabed and subsoil were enshrined in the 1964 Continental Shelf Act, allowing for activities including oil and gas extraction in a zone that extends as far as 200 nautical miles from the UK coast.
• First-of-its-kind attribution study on carbon majors’ emissions and heatwaves: In September, a study, Systematic attribution of heatwaves to the emissions of carbon majors, was published – directly linking carbon emissions from individual fossil fuel companies to dozens of deadly heatwaves for the first time. The research finds that the total emissions from 180 “carbon major” companies are responsible for about half the increase in heatwave intensity that is being caused by global heating. Evidence suggests that the emissions from any one of the 14 biggest fossil fuel companies alone have been enough to cause more than 50 heatwaves that would otherwise have been “virtually impossible". In terms of potential use cases for the research, the findings “could provide fresh evidence to support lawsuits seeking to hold companies accountable for their impacts on the climate.”
  • OEP analysis of Defra’s marine safeguarding: The Office for Environmental Protection (OEP) identified “potential failures to comply with environmental law” in relation to plans for achieving Good Environmental Status (GES) of UK marine waters. The GES framework under Defra’s Marine Strategy provides the basis for assessing and safeguarding marine health. In its oversight, the OEP finds evidence that the statutory December 2020 deadline to achieve GES was not met. Defra has not responded to the two month deadline, raised in September, to address OEP's information notice of these potential legal risks. 
  • High Seas Treaty: In September, the landmark High Seas Treaty (also referred to as the Biodiversity Beyond National Jurisdiction (BBNJ) Agreement) passed the threshold of 60 governments signing it into law, clearing the way for the agreement to enter into force in January 2026. Declared to be the “most important global environmental agreement since the 2015 Paris Agreement,” the Treaty will help to expand marine biodiversity protection and recovery, by creating a legal mechanism for establishing protected zones in areas beyond national jurisdiction. Having signed up to the Agreement in 2023, the UK government has introduced a landmark bill – the Biodiversity Beyond National Jurisdiction Bill – to ratify the Treaty. Scheduled to begin its second reading in the House of Lords in December, the government has said that following the passing of the bill, further secondary legislation will be required before the Treaty can be ratified by UK law. It has been speculated that the UK government has made progress on this in preparation for the UN’s first Ocean Treaty COP (Conference of the Parties) in 2026.

• Record UK climate-aid spending on nature: In September, Carbon Brief reported that the UK’s climate-aid spending on nature protection and restoration reached record levels of nearly £800 million in 2024. Record spending levels suggest that the UK is on track to achieve its five-year pledge to provide £3 billion in nature-related funding for developing countries, and £11.6 billion in climate finance by 2026. The largest portion of UK spending on nature and forests last year was on the Scaling Climate Action by Lowering Emissions (SCALE) programme backed by the World Bank, which channels financing into “high-integrity carbon credits” projects.
• UK commitment to global plastics treaty: In a September House of Lords debate on plastic pollution, the UK government confirmed that it “remains committed to pushing for an ambitious global treaty on plastic pollution despite the failure of successive talks in the past three years.” As a founding member of the High Ambition Coalition to End Plastic Pollution, the UK government stated that its aim is to continue with the common ambition to end plastic pollution by 2040.
• Nature loss and GDP: A report from the Green Finance Institute (GFI) and WWF published at the end of August finding that the degradation of nature in the UK will cut UK GDP by nearly 5%, “if the private sector does not make a greater effort to halt the decline.” While acknowledging the risks nature degradation poses, the report highlights the significant economic returns investment in nature can produce for businesses across sectors. In terms of practical steps businesses can take, the report provides evidence of “nature-positive transition pathways (NPPs)” having a positive impact both on businesses’ environmental improvement and economic performance.
• The Joint Nature Conservation Committee (JNCC) published its annual update report, UK Biodiversity Indicators 2025, in December, finding that more indicators are deteriorating or showing no change than improving – both over the short and long term.
• December analysis from the University of Exeter finds that the effectiveness of ambitious efforts to attract over £1 billion annually into nature recovery by 2030 could be “undermined without stronger governance and regulatory oversight.” The analysis sets out a number of recommendations including the establishment of a centralised, independent regulator to oversee the UK Nature Markets Framework nationwide; the development of unified, science-based metric frameworks to ensure consistency and accurate quantification of biodiversity value; the introduction of regulation for corporate biodiversity impact disclosure to ensure companies assess, disclose, and address their biodiversity impacts.
• Nature’s Rights Bill: A private member’s bill to enshrine the rights of nature was introduced in the House of Lords in late October. The draft Nature’s Rights Bill looks to establish a legal framework for recognising some degree of rights for nature in the UK Constitution, laws and/or regulations. Key aims include embedding Rights of Nature (RON) principles into the Environment Act 2021 and Climate Change Act 2008 frameworks, building on their existing recognition of public interest in the environment.
• Nature amendments to Planning & Infrastructure Bill: On 13 November, MPs in the House of Commons voted down two amendments to the Planning and Infrastructure Bill – Amendment 40, which would have maintained species and habitats protections, and Amendment 38, which would have granted more protection to chalk streams. In a report published on 16 November, the Environmental Audit Committee (EAC) found that measures in the Bill are not enough to allow the Government to meet both housing and nature targets, suggesting, “Using nature as a scapegoat means that the government will be less effective at tackling some of the genuine challenges facing the planning system.” A number of UK nature charities have called for other nature-related amendments to be upheld, including Amendment 130, which looks to embed the mitigation hierarchy principle across the Bill, so that developers first seek to avoid harm to nature, seeing mitigation and then compensation as a last resort. The Bill has returned to the House of Lords as of 24 November, and complete agreement between the Lords and the Commons is needed before the Bill is sent for Royal Assent.
• Climate-driven food inflation: October analysis from the Energy & Climate Intelligence Unite (ECIU) finds that the price of foods impacted by extreme weather is rising over four times faster than others in the average UK supermarket. Food inflation, which remains a key contributor to the UK’s headline inflation rate, is driven significantly by climate-impacted food items, namely, butter, beef, milk, coffee, and chocolate. ECIU Food and Farming Analyst, Chris Jaccarini stated, “There is no monetary policy lever [central banks] can pull to address this. Only by reducing our emissions to net zero and bringing balance back to our climate will we limit the impact of climate change on food prices in the future.”
• New food and farming mega-alliance: Five UK food and farming alliances announced in December that they are joining forces to form a mega-alliance – the Food Strategy Alliances – together representing over 160 organisations. The alliance’s first move was an open letter to the Secretary of State for Environment, Food and Rural Affairs, urging the UK government to create a joined-up healthy food and sustainable farming plan backed by legislation and put nature and climate-friendly farming and growing at the core of the national food strategy.
• Drought preparedness: The Environment and Climate Change Committee published an inquiry in November on Drought Preparedness. The inquiry looked to determine whether current drought management practices and policies are sufficient for responding to current and future risks. This comes as the Environment Agency (EA)’s Drought prospects report warns that England faces widespread drought lasting into 2026 unless there is substantial winter rainfall.

• SME house building: The Home Builders Federation released a 2025 State of Play Report in November, outlining the significant challenges SME home builders are facing in delivering the UK government’s pledge to deliver 300,000 homes annually over the next five years. The report finds that 97% of SME home builders believe “tax and regulation will stifle housebuilding in the next year,” heightening the need for more urgent and consistent policies. HBF’s analysis suggests that new homes delivery could be increased by up to 56% (100,000 properties a year) if barriers to building are removed.
• UK’s flood risk analysis: October data from the Environment Agency (EA) shows that around 6.3 million homes and businesses in England are at risk of flooding from rivers, the sea, or surface water. Guardian analysis suggests that some towns may have to be abandoned as areas become uninsurable against climate change, with insurance industry experts cautioning that the risk is higher for housing and commercial property in densely populated areas. Despite this mounting risk, polling shows that 45% of the UK public are unaware of the flood risk for their home, highlighting the need for more concerted public awareness efforts. The EA is working closely with the UK government to deliver £2.65 billion of investment by March 2026 to scale up new and improve existing national flood defences.