Beyond the net zero debate: Five reasons your competitors are maintaining momentum
The G7 political landscape has altered significantly in recent years. Elections and leadership changes have prompted shifts in economic priorities and debates around energy security, and competitiveness, with net zero policy increasingly at the centre of the conversation.
While most G7 countries are committed to achieving net zero by 2050 or earlier, and approximately half of the 50 US states have some form of GHG emission reduction targets, some politicians have been asking questions about the costs, pace and even the necessity of the transition.
Some parties are pledging to withdraw from international agreements, or revoke national climate policies, in some cases proposing to abandon targets they previously set, for example the Conservatives in the UK. Arguably most notably, in January 2025 the Trump administration withdrew the US from the Paris Climate Agreement for the second time.
Such divergence is in stark contrast to the broad consensus that had emerged over the preceding decade; where the wealth of scientific evidence of human-driven climate change had helped unite policymakers around the need for action. But with political positions in flux, businesses are left navigating an increasingly complex policy environment with a lack of long-term confidence. It is no surprise therefore, that in BSI’s recent research a fifth of G7 businesses cited global or domestic political uncertainty as barriers hindering their progress on net zero.
In the last 12 months a quarter (24%) of G7 businesses have adjusted their net zero policy and transition plans and, in response to political debate and attitudes towards net zero, three in five have changed how they communicate their net zero efforts, choosing instead to frame their messaging around the wider benefits of decarbonization; such as businesses resilience, managing risk and increasing efficiency.
The good news is that only a small number of businesses appear to be rolling back, with only 14% having paused their targets and only 13% having dropped them altogether. Overwhelmingly in fact, G7 businesses are ploughing ahead; 83% remain committed to their national net zero targets and 38% expect to increase net zero investment in the next year. For many, their focus has evolved from ambition to implementation; prioritising actions according to carbon impact, cost, feasibility and wider business value, and embedding delivery into operational and financial planning.
Here we explore the five key drivers behind this ongoing momentum, and look at why keeping pace matters for your business:
1. Political and regulatory uncertainty, but enduring market expectations
Across the G7, various regulatory and mandatory disclosure requirements legally compel businesses to accurately measure and report on their climate impact. This is particularly the case in the EU, where regulations such as the EU Emissions Trading System (EU ETS), Corporate Sustainability Reporting Directive (CSRD), Corporate Sustainability Due Diligence Directive (CSDD), apply across all member states. This means even if national political moods shift, they would still need to comply with the block.
The EU also sets regulations that impact businesses in other countries that want to trade within the EU market. For example, the Carbon Border Adjustment Mechanism (CBAM) applies to EU importers of high-carbon products such as iron, cement, electricity and fertilisers. The upcoming Directive on Empowering Consumers for the Green Transition (ECGT) applies to businesses located and operating within the EU, as well as any business selling into the EU regardless of their location.
Other G7 countries have their own regulations. Examples include the Canadian Greenhouse Gas Reporting Program (GHGRP), the UK climate-related financial disclosure rules, and mandatory sustainability and climate disclosures for listed companies in Japan. Whilst these may not apply to all businesses, many smaller companies are falling in scope, or being expected provide sustainability data as part of customer, investor and supply chain requirements.
Approximately a fifth of G7 businesses cite policy demands as a key driver for their net zero action. Despite ongoing political debate around net zero, these regulations remain in force. And even if policy priorities evolve, significant regulatory changes are unlikely to happen overnight.
This means businesses need resilient, long-term transition plans grounded in material risks, opportunities and stakeholder expectations, rather than plans that reset with each change in the political cycle. Indeed 79% of G7 businesses believe net zero will be a political priority again in this next decade, and are therefore continuing to work towards it.
2. Net zero is good for business
Increasingly businesses are seeing the commercial opportunities of net zero with three quarters saying they expect it to open new markets and innovation opportunities, and businesses citing cost savings and increasing market competitiveness as key drivers for their net zero action.
Looking at the wider economy, 77% of business leaders agreed that pursuing a net zero economy could give their country an economic advantage, and three quarters said that the economic risks of not reaching net zero outweigh the risks associated with the transition.
All this suggests that businesses value the commercial and economic benefits of net zero. Notably, when asked specifically why they would continue to pursue net zero amongst political uncertainty, 78% said because ‘it is good for business’.
This is not to say that the transition does not have a cost, indeed 73% said that attempting to reach net zero adds pressure to their business performance. However, for three quarters it is a price worth paying, with 75% saying the cost of the net zero transition is outweighed by the long-term benefits.
As the majority recognize, taking action now is likely to reduce costs later down the line.
3. Building business resilience
With 2024 remaining the hottest year on record and global temperatures expected to remain at near record levels, extreme weather is creating increasingly material risks for businesses. As such, climate change is no longer solely an environmental issue - it is increasingly a significant business resilience and adaptation challenge.
Extreme weather events are causing physical damage to assets, disrupting operations and supply chains, increasing operating costs, and placing pressure on workforce health and productivity, as well as escalating insurance premiums, or in some cases causing complete loss of insurability. All this adds to an environment of tangible financial risks for organisations across sectors.
Against this backdrop, it is unsurprising that three quarters of G7 business’ view net zero as critical to their long-term resilience. With 81% concerned about the increasing costs of failing to prepare for climate change and 77% worried about future supply chain disruption, businesses are continuing to pursue net zero as a strategic resilience measure as well as a method to mitigate environmental impacts and comply with regulatory requirements.
A credible transition plan supports long-term resilience, but businesses will also need specific adaptation measures to manage the physical climate impacts already occurring. As the real-world impacts of climate change continue to intensify, pursuing net zero will be essential for your business to mitigate the associated risks.
4. Customer and stakeholder expectations remain
Whilst political parties may be debating the value of net zero, uncertainty does not appear to be filtering down to consumers. A BSI global public survey found 71% of people believe climate change is the most critical issue facing society, and four in five are concerned about how it will impact future generations (1).
Translating this concern to their purchasing decisions, 83% said it’s important for businesses to take action to reduce their emissions1, and three in five people will seek out environmental and sustainability claims when purchasing goods (2).
Recognizing this consumer desire to make more sustainable choices, G7 businesses placed customer demand as another key driver for their net zero action. Whilst three quarters specifically stated that meeting customer and client expectations was a reason to continue with their net zero action despite political debate. 78% went as far as to say they believe their net zero action will give them a competitive edge over their competitors that scale back.
The understanding is that sustainability increasingly influences purchasing, procurement and investments decisions. For businesses wanting to retain and grow your customer base, attract investment, and win tenders - having a trusted and verified route to net zero is one way to demonstrate your sustainable commitments.
5. Ensuring a sustainable future
Demonstrating regulatory compliance, unlocking commercial value, strengthening resilience and responding to customer expectations are all powerful drivers of net zero action. Yet for many business leaders, the rationale extends beyond risk mitigation and competitive advantage. There is a growing recognition that accelerating the transition to a net zero economy is fundamental to safeguarding future prosperity, for business as well as wider society.
Business leaders understand that economic growth and climate action are not opposing forces. In fact, 78% say economic growth and net zero can be achieved simultaneously. 76% believe it is important to maintain momentum on net zero, and that doing so can stimulate economic growth, create jobs and strengthen energy security. Looking longer term, almost eight in ten (79%) say pursuing net zero is essential for delivering a sustainable future.
Perhaps that's because the net zero conversation business is having has matured. It is no longer just about carbon targets or compliance checklists- it's about creating the conditions for businesses, economies and communities to thrive for decades to come. Business leaders increasingly recognise that investing in the transition is an investment in future customers, future talent and future markets.
Put simply, forward-thinking leaders know there is little value in building successful businesses for tomorrow if we fail to protect the world they'll operate in. Net zero is not just an environmental ambition; it is a commitment to a future worth planning for. And that is something business has both the opportunity and responsibility to help deliver and can ultimately benefit from.
(1) BSI global survey, 9,000 participants, Australia, China, France, Germany, India, Japan, Netherlands, UK, US, 2024.
(2) BSI & CISL, Global survey, 8,000 participants, Australia, China, Germany, India, Japan, Netherlands, UK and US, 2025.
