Green Policy Review 2026: the gap between ambition and delivery

Our annual Green Policy Review takes stock of where UK climate and environment policy has got to. This year’s edition covers the Labour government’s first two years and arrives as the new Prime Minister sets out his own economic priorities.

For the businesses we work with, the most useful question is: where has the government’s ambition turned into something they can plan investment around, and where has it not?

Where delivery has followed

Clean power is where delivery has gone furthest. The transmission connections queue has been reformed to prioritise ready, viable projects over speculative applications. The Review of Electricity Market Arrangements has concluded, ending years of uncertainty over market design, and Great British Energy is capitalised and operating. None of this is finished, but developers and investors now have something firmer to work with than they did in 2024.

Water policy has moved further in two years than in a generation, from the Water (Special Measures) Act through the Cunliffe Review to a white paper committing to a single integrated regulator. This has yet to translate into significant improvements in environmental outcomes, but the direction of travel is now clear

Net zero is now built into the government’s growth plans. The Modern Industrial Strategy names clean energy industries as one of its eight priority sectors, and the National Wealth Fund is providing finance to unlock private investment in them. On nature, the architecture has been substantially rebuilt: the Nature Restoration Fund, a revised Environmental Improvement Plan, the Land Use Framework and the Farming Roadmap have all been introduced.

Where we still await progress

The first gap is electricity costs. Last year’s Budget moved some policy levies off household bills, cutting a typical bill by around £150, the first substantive move to narrow the gap between electricity and gas prices. That principle now needs to be extended to business bills. Until it is, the business case for electrification will remain weaker than it should be across industry, freight and heating.

The second is strategy that has been promised but not delivered. The Circular Economy Growth Plan for England has been repeatedly delayed, and the update to the 2021 Industrial Decarbonisation Strategy, the Water Transition Plan and the response to DfT’s HGV consultation are all still outstanding. Each delay leaves businesses making capital decisions against a policy framework they can only guess at.

The third is climate adaptation. This year, the Climate Change Committee found the UK’s preparations inadequate and put the cost of inaction at 1% to 5% of UK GDP by 2050, against about £11bn a year of investment that could avert much of it. About half of that must come from private capital, but the incentives and standards needed to attract it don’t yet exist. The Review argues that adaptation should be treated the way clean energy has been, with long-term policy certainty, stable revenue frameworks and blended finance. Given the UK’s strengths in engineering, insurance and financial services, it is also a substantial growth opportunity.

What we’re asking for

We are not asking the government to change direction, but to make faster progress in the direction it has set. That means moving policy costs off business electricity bills, publishing the strategies that have been promised, and giving adaptation the long-term certainty that clean power now has. This is how action on climate and nature will support growth, resilience and long-term prosperity across the UK.

Read the full Review here. If you’d like to discuss a particular section or issue, please get in touch.