UK business leaders and investors are recognising the economic returns of climate-friendly investments. The majority (87%) of UK CEOs have made climate-friendly investments in the past five years, according to our 2025 UK CEO Survey. And over one in three CEOs (38%) report that these climate-friendly investments have resulted in an increase in revenue from new products or services. That’s compared to only 1.8% reporting a decrease in revenue because of climate-investments. And they have the backing of investors, with 74% of UK respondents to our Investor Survey willing to invest more in businesses that are taking action to tackle climate issues.
Climate change, alongside AI and shifting geopolitics, is reconfiguring the global economy and setting value in motion. Industries are being reconfigured, bringing new opportunities and challenges. While climate-friendly investments include measures to protect value (in response to physical climate risks or regulation), they also include initiatives that create value and competitive advantage and align a company to a more sustainable future.
For some companies and sectors, climate pressures demand significant investment and a complete rewiring of their business model as they pivot towards decarbonisation. Meanwhile, others are focused on implementable, but often incremental, opportunities to drive cost savings including by managing energy use. For example, our 2025 Energy Survey highlighted that many UK businesses are adopting LED lighting, negotiating renewable energy supply agreements or implementing on-site solar.
Whether it’s managing energy demand, working with suppliers and communities to build sustainable supply chains or launching new products designed to mitigate climate change, being clear on both the sustainability impact and the commercial return of any investment is critical.
The climate tech opportunity
Technology is a key area for climate investment. The UK climate technology sector saw a boost in 2024, with a 24% increase in investment. AI-powered climate technology solutions are gaining momentum, enabling businesses to analyse complex data sets, optimise their energy use and make carbon management more efficient.
“The growth of climate tech in the UK is being enhanced by AI-powered solutions and new business models, which have the potential to accelerate and create new value from decarbonisation opportunities. However, as the impacts of climate change increase, more investment is also needed to decarbonise high-emission and hard-to-abate sectors like heavy industry, agriculture and the built environment, alongside developing innovative adaptation and resilience technologies that protect people, assets and supply chains.”
Dan Dowling,
Partner, PwC UK
Our Net Zero Future50 report showcases 50 UK climate tech innovators that are driving the decarbonisation of key sectors, recognising that there has been under-investment in some sectors relative to their emissions contribution.
Overcoming barriers to climate investment
The case for climate-friendly investment is compelling, but challenges remain.
For businesses, 36% of UK CEOs say lack of demand from external stakeholders is a blocker. A lack of internal incentives may also be an issue. Only 51% of UK CEOs have their compensation partly determined by sustainability metrics. Our CEO Survey found that the higher the percentage of personal incentive compensation linked to sustainability metrics, the more likely it is that CEOs report revenue increases from climate-friendly investments.
21%
of UK CEOs with zero sustainability-linked compensation reported an increase in revenue from climate-friendly investments
58%
of UK CEOs with more than thirty percent sustainability-linked compensation reported an increase in revenue from climate-friendly investments
Competing priorities also pose a challenge. While nearly a third (27%) of UK investors rate climate change among the top threats over the next 12 months, this is roughly the same proportion who cite inflation, macroeconomic volatility and technological disruption. With many of these issues feeling more immediate, climate can fall down the list of priorities.
“It's great to see that investments in sustainability are being viewed not only for their environmental impact but also for their strategic and commercial value. Despite the challenges and competing pressures, the momentum behind sustainability means that companies aiming to create value and lead will need to transform themselves for a net zero, nature-positive world. The growing interest in responsible investing highlights the understanding that supporting sustainable businesses is a smart strategy to build resilient, future-ready portfolios.”
Carl Sizer,
Chief Markets Officer, PwC UK
Building trust through transparency
A further challenge is the complexity of the regulatory landscape, which one third of CEOs say is an inhibiting factor when it comes to climate-friendly investments.
“Regulation needs to support business, encourage investor confidence and continue to build trust in our markets. When it comes to sustainability, investors express concerns about transparency and access to reliable data, with around four in ten believing companies are providing unsupported claims about their sustainability performance in their corporate reporting.”
Nick Bouch,
Partner, PwC UK
With regulation evolving, businesses can get ahead by taking a strategic approach to their reporting and ensuring transparency with investors and wider stakeholders. This will open opportunities and ensure they’re well positioned for the future, whatever regulatory developments come their way.
From value protection to value creation
Climate change is poised to leave the global economy nearly 7% smaller in 2035 than it would have been otherwise. That means standing still on climate, and sustainability more broadly, is not an option – it’s value-eroding.
UK investors agree: 51% say that it is very important that companies change the way they create, deliver and capture value because of climate change. They also agree that sustainability can’t be an add-on: 77% say that organisations should embed ESG and sustainability directly into their corporate strategy.
“Sustainability is an untapped frontier of competitive advantage. Shifting the narrative from managing climate threats to creating value from sustainability is critical to future growth strategies.”
Pragya Jain,
Partner, PwC UK
Forward-looking businesses are embracing sustainability as a source of business value. They’re addressing where their value is at risk and limiting their exposure. They’re identifying how sustainability can be a source of value creation. They’re not just making sustainable investments; they’re aligning their business and sustainability objectives to make the shift to a sustainable business model.
Contact us
Energy & Infrastructure Deals Valuations Partner, PwC United Kingdom
Tel: +44 (0)7540 288606
