A recent report reveals that a staggering 70% of UK businesses have experienced revenue losses over the past year, directly attributed to climate-related impacts. The findings highlight a growing disconnect between businesses’ awareness of climate risks and their understanding of the underlying causes.
Key Takeaways
- 70% of UK businesses reported revenue losses of 1% or more due to climate change.
- 40% experienced losses of 6% or more, with 11% facing over 10% in losses.
- Rising energy costs and resource shortages were the most common impacts.
- Supply chain disruptions affected 22% of businesses.
- Only 58% acknowledged their operations’ dependence on nature and biodiversity.
The Financial Reality of Climate Change
The Climate Commitments Report 2026, which surveyed 1,600 UK business leaders, found that over half of companies are already negatively affected by climate change. A significant 84% reported at least one direct impact within the last two years, underscoring a substantial gap between perceived and actual climate risk. Only a small fraction, 13%, claimed to be entirely unaffected.
The most frequently cited climate impact was increased running costs due to energy spikes or resource shortages, affecting nearly a third of businesses. Supply chain disruptions were reported by 22%, alongside increased insurance premiums and growing consumer pressure for climate action.
Business Size and Impact
Larger companies, specifically those with 250-999 employees, bore the brunt of these financial impacts more severely than the largest enterprises. This disparity is likely due to the latter’s more diversified supply chains and robust risk management infrastructure.
A Dangerous Blind Spot
Despite feeling the financial consequences, a concerning trend emerged: only 58% of businesses acknowledged their operational dependence on nature and biodiversity, a decrease from previous reports. The report authors noted this suggests a "dangerous blind spot," where businesses experience financial fallout from ecological breakdown without connecting it to its root cause.
Roadblocks to Action and Building Resilience
Key obstacles preventing businesses from taking more decisive climate action include financial limitations (28%), the high cost of technology (26%), and time constraints (25%). A lack of government support or incentives also slowed progress for 21% of respondents.
Despite these challenges, 83% of businesses recognise that achieving net-zero is critical for protecting their future bottom line, with larger enterprises feeling this urgency more acutely than SMEs. In the short term, 31% are implementing efficiency measures to cut energy consumption, while 27% are accelerating their transition to renewable energy.
Net-Zero Strategies and Progress
Carbon tracking is central to net-zero efforts, with 77% of businesses actively monitoring their emissions, and 35% having started this process in the last year. Over 80% of those measuring emissions have publicly disclosed their carbon footprint, though 53% reported having ambitious targets without formal validation.
Progress towards net-zero targets is mixed. While nearly 40% believe their strategy is on track for 2050 or sooner, 46% are either unlikely to meet their targets or are unsure of their achievement timeline. Larger businesses generally express more confidence in their net-zero progress compared to SMEs.
Reaping the Rewards of Sustainability
For a quarter of businesses, the primary motivators for embracing sustainability are enhancing brand reputation and driving business growth. Climate resilience and risk mitigation were cited by 23%, while 21% highlighted the importance of attracting and retaining customers.
Notably, virtually all companies (96%) actively reducing their emissions have already experienced commercial benefits, including improved brand image and attracting more sustainably-minded customers. Almost a quarter of businesses saw an estimated 14.4% increase in total revenue, alongside operational efficiencies and enhanced competitive advantage.
