Deliver ‘robust’ net-zero plans in response to rising costs, Liz Truss urged by more than 100 businesses

Upon her election on 5 September, it was clear that Truss’s priority would need to be making further interventions to shield Brits from the rising costs of food and energy. Ofgem had, just days before, set an energy price cap for October exceeding £3,500 annually for dual-fuel domestic bills. This increase, news outlets reported, would push many into fuel poverty and force some businesses to close.

In her first action as Prime Minister, Truss announced a package of interventions on energy security and affordability. The package included a freeze on energy bills, effectively holding them at current levels. Government money will be used to pay energy companies the difference.

This move was welcomed, but many green economy representatives asked why it had not been paired with other measures, like a new national home insulation scheme. Concerns were also raised about Truss’s moves to reverse the UK’s ban on fracking in communities where the practice has public support; to go ahead with new oil and gas licencing; and to reportedly instruct Jacob Rees-Mogg to pause the Energy Security Bill. All of these seem to feed into Truss’s view that the UK’s net-zero transition should be “pro-business and pro-growth”, using a different approach than those previously recommended by the Climate Change Committee.

Now, a total of 116 major businesses and financial institutions have written an open letter to Truss, urging her not to sideline the UK’s net-zero transition in favour of short-term economic growth. The letter argues the case for delivering an economic recovery for the UK grounded in low-carbon technologies and nature conservation and restoration.

The letter has been coordinated by the Corporate Leaders Group UK (CLG UK) at the University of Cambridge. Signatories collectively represent £1.8trn of market capitalisation and more than 425,000 members of staff.

It states: “As skyrocketing energy bills inflict considerable costs on businesses and push vulnerable households into poverty, we would like to see you prioritise policies that will address this crisis, as part of a robust net zero strategy. […] Acting now to accelerate the energy transition, could both support UK households with the cost of living and deliver huge economic benefits, unlocking opportunities for the UK to be a leader in clean growth.

“At the same time, restoring nature through a comprehensive environmental improvement plan, a strong national adaptation plan, and setting ambitious long-term targets will help build the UK’s resilience and support the economy by reducing threats to food security and the economic and social damage of climate impacts.”

Among the corporations signing the letter are Sky, Amazon UK, Danone UK & Ireland, Grosvenor Property UK, IKEA UK & Ireland, Coca-Cola Europacific Partners, Interface, PwC UK and Signify. Signatories from the finance space include Zurich Insurance, BNP Paribas and Aviva.

Supporting the letter alongside the businesses are 12 business groups, including the Aldersgate Group and the We Mean Business Coalition.

Summarising the rationale for sending the letter, CLG UK’s director Eliot Whittington said: “The UK is facing severe economic headwinds. The best and only sensible way of facing up to them has to include investing in British renewable energy and helping homes and businesses be more energy efficient.  Maintaining and strengthening our focus on net zero and nature protection can help us move beyond the rising costs of fossil fuels and deliver a better economy with more energy and food security, more jobs and greater social equality.”

A report from the CLG this summer concluded that addressing the UK’s rising energy prices in a “climate-friendly” way would not only cut bills for households and businesses now, but reduce the likelihood of future price spikes and be beneficial to the economy in the short and long term. Approaches locking in carbon would deliver lower benefits in the medium and long-term, that report found.

Whittington added: “What’s more, the Conservative Party has rightly enshrined net zero into law and in so doing reaffirmed UK leadership on climate action, further demonstrated at last year’s COP26 summit. UK business and finance leaders urgently want to see more leadership from the government on this agenda, with clear, well-resourced and defined plans to get us on track for a more stable climate and a stronger economy.”