How the UK’s Net Zero Economy Outpaced All Other Sectors
The growth of the UK's net zero economy is outpacing the country’s overall economic growth three times over.
It expanded by 10% in 2024 compared to the broader economy’s sluggish performance.
According to new analysis by the Confederation of British Industry (CBI), green businesses contributed £83bn (US$105bn) in gross value added last year.
This reinforces the economic viability of the net zero transition.
The study highlights the increasing significance of businesses engaged in renewable energy, electric vehicles, heat pumps, energy storage, green finance and waste management.
These 22,000 companies now employ nearly one million people across the UK.
All in, they offer an average annual wage of £43,000 (US$54,142) —substantially higher than the national average of £37,400 (US$47,091).
"Looking for growth? Then you should be looking in the clean, green sectors," says Rachel Orr, CEO of Climate Outreach.
An economic opportunity or a financial burden?
The CBI’s findings challenge the past claims of right-wing political parties that net zero policies harm the economy.
The leader of the Reform UK party, Nigel Farage, has previously said that “net zero is crippling our economy.”
In recent times, the Conservative Party has increasingly questioned its economic viability too.
The party’s leader, Kemi Badenoch, recently referred to the UK’s 2050 net zero target as a “mistake.”
However, the CBI’s Chief Economist, Louise Hellem, rejects such assertions.
“It is clear, you can’t have growth without green – 2025 is the year when the rubber really hits the road, where inaction is indisputably costlier than action,” she explains.
Rachel Reeves, the Chancellor of the Exchequer, has faced criticism for suggesting economic growth should take priority over climate targets.
She later clarified her stance, though. “There is no trade-off between economic growth and net zero," she said, "quite the opposite."
“Net zero is the industrial opportunity of the 21st century.”
Rollo Maschietto, Public Affairs Manager at REA believes this is an opportunity that the UK government cannot afford to pass up on.
"The government has a choice to make: double down on this momentum or risk falling further behind," he explains.
Regional benefits and productivity gains
Unlike many sectors that remain concentrated in London and the South East, net zero businesses are expanding nationwide.
The West Midlands, Yorkshire, Humberside and South West England have all emerged as climate tech hotspots of late.
Schneider Electric, the innovative French energy giant, recently invested US$53m in a new state-of-the-art manufacturing facility in North Yorkshire, for example.
Further north, Scotland has seen a 20% increase in net zero jobs since 2022.
What’s more, the sector is becoming more and more productive as it expands.
Net zero jobs are, on average, 38% more productive than the UK workforce overall, according to the CBI.
"The UK has an incredible opportunity to lead the world in growing the economy of the future - based on sustainable jobs and industries - to create long-term growth and expertise in the key industries of the future, and set Britain up for long term success as the world transitions towards net zero," says James Alexander, CEO of UKSIF.
Energy security and international competitiveness
It is clear that the UK’s reliance on gas has led to volatile energy prices across the country in the past few years.
These vulnerabilities were only exacerbated by Russia’s invasion of Ukraine in 2022.
Increasing domestic clean energy capacity would shield the UK from such external shocks. This is one of the net zero economy’s main focuses.
“We don’t want to risk the higher and more volatile energy bills that we’ll get if we continue to rely on fossil fuels,” says Luke Murphy, Chair of the All-Party Parliamentary Group on Climate Change.
“We don’t want Putin’s boot remaining on our neck.”
Despite the UK’s strong net zero growth, the report suggests it is lagging behind global competitors.
The sector contributes 50% more to EU economies, while in China, clean energy industries accounted for a record 10% of GDP in 2024.
However, experts believe this is no time for complacency.
“There are huge costs to not seeing this transition as an economic opportunity,” Luke says.
Can the UK really be a leader in clean tech?
The CBI report makes clear the dual benefits of net zero investment: reducing emissions while driving economic growth.
The UK’s green sector has now surpassed traditional industries such as farming and advertising in its economic contribution.
As the government weighs its commitment to climate targets amid economic uncertainty, the data suggests that accelerating the net zero transition may be the most pragmatic course—both environmentally and financially.
Ed Miliband, the UK’s Energy Secretary, has recently relaunched the government’s Net Zero Council, which will preside over policy in this area.
Since the report’s publication, he has described the CBI’s findings as irrefutable.
“These numbers speak for themselves. Net zero is essential to growth, a strong economy and money in working people’s pockets," Ed Miliband explains.
"Our mission to make Britain a clean energy superpower is the route to energy security, good jobs and investment in our communities.”
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