UK ESG Fast Facts

IBISWorld presents a collection of fast facts on the ESG performance of different sectors of the UK economy.

Agriculture, Forestry & Fishing 

Environmental

• The UK Methane Action Plan from October 2025 states that agriculture now represents 48% of UK methane emissions and that agricultural methane fell 16% from 1990 to 2023. The main contributor to the UK’s agricultural methane emissions is the UK’s cattle population, which produced 78% of agricultural methane emissions in 2023. It also states that agriculture policies in the Carbon Budget & Growth Delivery Plan contribute 38% of the reduction in UK methane emissions from 2023 to 2030.
• In the latest Spending Review Defra has secured a funding commitment of over £2.7 billion from HM Treasury for sustainable farming and nature recovery for 2026-27 to 2028-29. Additionally, funding provided to farmers through the Environmental Land Management Schemes is set to expand by 150%, rising from £800 million in 2023-24 to £2 billion by 2028-29. This financial boost is aimed at supporting the national commitment to achieving net-zero emissions by 2050. In July 2025, the government announced a new £150 million funding round as it reopened the capital grants scheme to support various farming practices. This funding will aid on-farm improvements like tree planting, flood prevention, upgrading slurry systems and enhancing water filtration. The goal of these capital grants is to boost farmers' profitability while safeguarding natural resources like soil and water.
• The UK Pesticides National Action Plan (NAP) 2025 outlines a strategy for managing pesticide use to minimise risks to environmental and human health, thereby ensuring a sustainable future. The plan includes a commitment to reduce the potential environmental harm caused by pesticides by at least 10% by 2030, ultimately improving soil health and water quality.

Social 

• According to Defra data, the total number of people working on agricultural holdings in England was 279,000 on 1 June 2025. This is a decrease of 1.9% since 2024 and continues the general downward trend seen over the last three years. Farmers, business partners, directors and spouses continue to account for over half (60%) of the total workforce and decreased by 3.1% to 168 thousand people in 2025, mostly due to a reduction in part-time farmers. Meanwhile, only 16% of principal farmers and holders were female, a figure largely unchanged over the last five years, while 40% of principal farmers and holders were aged 65 years or older and just 15% were under 45 years old.
• Sentiment towards British farming is on the up as “Buy British” narratives take hold. The 2025 AHDB/YouGov survey reveals that 71% of consumers hold a positive view of British agriculture, up from 67% in 2024 and the highest level since the survey began in 2019. 58% of consumers say they are likely to seek out British food over imported alternatives, offering a welcome boost for a sector that has struggled with rising input costs, volatile commodity prices and competition from cheaper imports.
• According to the Financial Times, while the agricultural sector has traditionally been male-dominated, more women have recently begun securing top positions. For example, Minette Batters serves as the president of the National Farmers’ Union (NFU) of England and Wales. This shift is largely driven by the sector's technological transformation and focus on sustainable practices. Supporting this trend, the Royal Agricultural University in the UK has seen an uptick in female students, with women making up 46% of the cohort in the 2022-23 academic year, up from 42% in 2019-20.

Governance

• The farming industry has been subject to widespread lobbying and protests following the government’s decision to introduce a £1 million limit on the inheritance tax (IHT) relief for farms from April 2026, after that there would be a 50% relief, at an effective rate of 20%, which has struck uproar among British farmers as many cite this will threaten the survival of their farms. As a result of the concerns raised, in December 2025, the government announced that the £1 million Agricultural and Business Property Reliefs threshold will be increased to £2.5 million from April 2026, meaning just 15% of farms are now eligible, down from the 25% previously.
• On 19 May 2025, the UK and EU established a renewed cooperation agenda at a summit, focusing on fisheries within a broader political agreement. Post-Brexit, the UK regained control over its Territorial Sea and Exclusive Economic Zone, but due to shared fish stocks, Total Allowable Catch (TAC) agreements were necessary. The UK's TAC share increased under the Trade and Cooperation Agreement (2021-2025), with EU access to UK waters set to expire in 2026. The new agreement stabilises stock division from June 2026, unless mutually altered, and grants reciprocal fishing access until 30 June 2038, as formalised by the Specialised Committee on Fisheries. This continues to drive competition and uncertainty over rule compliance by EU vessels.
• Research carried out by advocacy group Sustain and reported by The Guardian found that intensive livestock “megafarms” are continuing to progress through planning without disclosing their full emissions. This is despite a 2024 Supreme Court ruling requiring all major developments to account for significant direct and indirect greenhouse-gas outputs. Of the 35 planning applications submitted since the ruling, none provided emissions data for the farms themselves, highlighting a major gap in environmental scrutiny.

Mining

Environmental

• The mining sector is seeking to decarbonise operations, with the oil and gas industry investing in carbon capture and renewable energy, while the government is also providing funding to help the sector move towards greener operations. UK Oil and Gas plc reaffirmed its shift from petroleum exploration to hydrogen storage, as it advances hydrogen storage facility projects in South Dorset and East Yorkshire.
• A recent report by Offshore Energies UK (OEUK), published in September 2025, revealed that the North Sea oil and gas industry has achieved a 35% reduction in greenhouse gas emissions between 2018 and 2024, exceeding the 25% target outlined in the North Sea Transition Deal for 2027. The report also shows a 78% reduction in overall volumes of reported unintentional oil and chemical releases between 2018 and 2024.
• The Disused Mine and Quarry Tips (Wales) Act 2025 received Royal Assent in September 2025. It aims to reduce the likelihood of landslides on disused coal and non-coal tips through the establishment of a new public body. The legislation makes provision for the assessment, registration and monitoring of disused tips.

Social

• The shift towards renewables and decline of the mining sector, including a ban on new licences, are having a significant impact on jobs in the UK, with trade union Unite criticising the unfavourable government policy in the North Sea. Published in June 2025, a study by Robert Gordon University titled ‘Striking the Balance: Building a Sustainable UK Offshore Energy Workforce’ states that the oil and gas workforce declined by about 5,000 jobs between 2023 and 2024, from 120,000 to 115,000 and if the current trend continues, this figure could plunge to between 57,000 and 71,000 by the early 2030s. Meanwhile, the workforce in the renewables segment will thrive and could climb from 39,000 to between 84,000 and 153,000 by 2035. Meanwhile, figures from Offshore Energies UK show that jobs in Scotland’s North Sea oil and gas industry have contracted by 13,400 in the past year. Between 2013 and 2023, the number of jobs in the industry plunged from 117,900 to 60,700. Critics warn that the country is becoming too reliant on imports.
• There is a focus on helping workers transition from mining to renewables. The UK government launched a tailored skills programme at the end of July 2025 aimed at supporting around 200 Aberdeen oil and gas workers’ shift to green energy opportunities. The Oil and Gas Transition Training Fund is part of the government’s Plan for Change and is backed by £900,000 of UK government funding.
• Health and safety are at the forefront of mining company operations. The Mining Remediation Authority's annual report for 2024 and 2025 highlighted its focus on safety and community well-being. It conducted 10,54 mine entry inspections and investigated over 1,000 mining hazards and subsidence claims to keep the public safe. However, it also reported that accidents and incidents increased from 10 in 2023-24 to 14 in 2024-25. The Authority published its Health, Safety and Wellbeing Plan 2025–2028 in October 2025, setting formal workforce protection standards for remediation staff working on hazardous mining sites. It focuses on occupational safety, mental health support and wellbeing frameworks, reflecting increased regulatory attention on mine worker safety and long-term exposure risks from polluted sites and abandoned mines.

Governance

• In the Autumn Budget 2024, the government confirmed the hike in the Energy Profits Levy (windfall tax) from 35% to 38%, removing the 29% investment allowance and extending the tax until the end of March 2030. The UK’s offshore energy industry association, Offshore Energies UK, has called for the government to remove the oil and gas windfall tax and replace it with a long-term mechanism, which could boost investment and strengthen the UK’s energy sector. The association states that recent ONS data shows profit for those investing in the oil and gas sector has turned negative. Many of the leading oil and gas companies lowered investment in the UK following the decision to hike taxes.
• Some companies in the sector have been under scrutiny over taxes. According to law firm Pinsent Masons, 14 oil and gas companies have been under investigation by the HMRC in relation to underpaying the Energy Profits Levy. Recently, the Financial Times reported that the government has called for an investigation into Prax Group, the owners of the Lindsey oil refinery since 2021, which filed for insolvency in June 2025, with hundreds of jobs at risk. It reports that the collapsed oil company owes the government up to £250 million in unpaid taxes. The site, which employed around 400 people, processed 96,600 barrels of oil a day in 2024. In September 2025, oil and gas company Serica Energy agreed to acquire assets in the UK North Sea from Prax Group.
• Oil and gas drilling has been controversial for quite some time, with climate campaigners voicing their concerns. In January 2025, following a case by environmental group campaigners, including Greenpeace, a court ruled that the approval for the Rosebank and Jackdaw oil and gas fields was unlawful. The Guardian reported that a further 13 oil and gas licences could be scrapped following the court’s decision. In March 2025, as part of its ‘Building the North Sea’s Energy Future’ consultation, the government confirmed plans laid out in its election manifesto to halt new licenses on new oil and gas exploration; however, the consultation has also left the door open for new fields to be drilled via adjacent existing ones, a move which has been welcomed positively by the oil and gas industry.

Manufacturing

Environmental

• According to the latest ONS greenhouse gas emissions estimates released in October 2025, the manufacturing sector saw the largest emissions decrease among industries, with emissions falling by 7.4%, from 70 Mt CO2e in 2023 to 65 Mt CO2e in 2024. This indicates progress in lowering the sector’s carbon footprint, though significant decarbonisation work remains.
• In June 2025, the government introduced the Clean Energy Industries Sector Plan, aiming to boost clean energy investments to over £30 billion annually by 2035. The plan also allocates £700 million to Great British Energy to develop domestic manufacturing facilities for clean power technologies, facilitating the manufacturing sector's shift to renewable energy sources.
• As emission targets approach, companies are increasingly investing in renewable energy to reduce their carbon footprints. For example, manufacturer Kimberly-Clark is investing over £125 million in green hydrogen infrastructure to decarbonise two of its manufacturing plants. Green hydrogen will replace natural gas used in steam generation, aiming for a 50% reduction in Kimberly-Clark's natural gas consumption across UK production lines beginning in 2027. These projects are supported by funding from the UK government’s Hydrogen Production Business Model (HPBM) and Net Zero Hydrogen Fund. Meanwhile, the Department for Business and Trade has announced support for transitioning the Scunthorpe steelworks from blast-furnace operations to electric-arc furnace technology, marking a major shift in UK steelmaking. Ministers will draw on the £2.5 billion funding package committed in February to help decarbonise the UK steel sector and underpin long-term investment.

Social

• The sector has been grappling with significant labour shortages, worsened by the pandemic and Brexit, alongside a persistent skills deficit. According to the Make UK Manufacturing Outlook Q4 2025 report, there were over 48,000 active vacancies in the sector as of October 2025, an increase from the 46,000 reported in the previous quarter, with the report highlighting that employment growth slowed markedly (from +15% to +3%, indicating significant contraction in recruitment activity). There is still an increasing urgency to develop skills within the industry and for government action to help bridge this gap.
• The UK's Modern Industrial Strategy 2025 sets out a 10-year framework aimed at boosting business investment and creating 1.1 million jobs, particularly within advanced manufacturing. The government is committed to enhancing skills through comprehensive reforms, including shorter apprenticeships and targeted upskilling and reskilling programs.
• As reported by ONS data, women constituted only 26.1% of the manufacturing workforce in 2024. The Women in Manufacturing Initiative UK aims to uplift female participation in the sector to 35% by 2035, helping to address labour shortages and promote industry growth.

Governance

• To advance the decarbonisation of industrial production, the UK will implement the UK Carbon Border Adjustment Mechanism (CBAM) starting in January 2027. This mechanism will impose a carbon price on high-emission industrial imports – specifically from the aluminium, cement, fertiliser, hydrogen and iron and steel industries - which are vulnerable to carbon leakage. UK exporters sending CBAM-sector goods to the EU will also encounter CBAM pricing and reporting obligations from 2026. Discrepancies between UK and EU carbon pricing may lead to additional costs and administrative complexities. CBAM elevates governance complexity for manufacturers reliant on foreign inputs.
• In April 2025, the Steel Industry (Special Measures) Bill was passed, empowering the Secretary of State to safeguard the future of UK steelmaking. This includes overseeing British Steel's operations, securing raw materials and maintaining blast furnace activities. Although there are no plans to nationalise British Steel, the government is evaluating the potential financial implications for public funds. Meanwhile, on 21 August 2025, the government declared it would take control of a significant portion of Sanjeev Gupta's Liberty Steel business. This decision comes after one of the UK's largest steelworkers was declared bankrupt in London's High Court, with the move aiming to safeguard the jobs of 1,450 employees.
• The Product Regulation and Metrology Act 2025 received Royal Assent on 21 July 2025, giving the government powers to regulate the safety and performance of products on the UK market, including addressing environmental and safety impacts.

Utilities

Environmental

• In December 2025, the UK’s state‑owned Great British Energy (GBE) unveiled a strategic plan to accelerate renewable power capacity ahead of the government’s 2030 decarbonisation goals. Under the strategy, GBE aims to deliver at least 15 GW of clean energy generation and storage by 2030 – enough to power about 10 million homes – by combining its own investments with partnerships that can mobilise roughly £15 billion of private capital. The plan prioritises onshore and offshore wind, local community energy projects and grid-scale storage, supporting over 10,000 jobs and broader industry growth in renewable infrastructure. This reflects a broader utility trend where fossil‑fuel dependency is giving way to large-scale clean power expansion, driving down emissions while reshaping investment flows in energy markets.
• In October 2025, the UK government outlined its Carbon Budget and Growth Delivery Plan, which sets out how it intends to meet its legally binding carbon budgets through to 2037 while securing economic and social benefits for businesses and households. Carbon budgets act as five‑year legally mandated limits on greenhouse gas emissions under the Climate Change Act and the new plan lays out a policy pathway to reduce emissions across energy, transport, homes, industry and land use, aligning with the UK’s net zero commitments. The strategy emphasises clean energy deployment, energy efficiency, low‑carbon transport infrastructure and investment in sustainable industries and frames decarbonisation as an opportunity to lower bills, create jobs and improve quality of life. Businesses across sectors – including utilities, manufacturing and heavy industry – will face increasing environmental expectations and compliance pressures as policies mature.
• The UK is committed to achieving a net-zero electricity system by 2030, as outlined in the Clean Power 2030 Action Plan. This plan targets the generation of 43-50 GW of offshore wind, 27-29 GW of onshore wind and 45-47 GW of solar power to significantly reduce the nation’s fossil-fuel reliance. Energy companies are required to boost low-carbon production and phase out fossil fuels, prompting increased investments in cleaner generation and storage. Centrica, a leading energy company, has committed to providing all its UK and Ireland customers with renewable or zero-carbon electricity by 2030. To meet this goal, Centrica plans to invest £600 to 800 million annually by 2028 in low-carbon generation, supply security and customer solutions, aiming to enhance green investments to over 50% between 2023 and 2028.
• The government is launching energy-efficiency initiatives to help households adopt low-carbon energy-saving measures to help achieve net-zero targets. As part of the Boiler Upgrade Scheme, grants of £7,500 are available for installing heat pumps in homes across England and Wales. This initiative supports the goal of installing 600,000 heat pumps annually by 2028, contributing to the broader effort to decarbonise heating in residential and commercial buildings. In line with these targets, energy companies like Centrica are also setting ambitious goals, aiming to reach 20,000 heat pump sales per year.
• The government has established a goal for water companies to achieve zero pollution incidents and a 50% reduction in leakage by 2030, which is monitored by Ofwat. However, the latest Ofwat Water Company Performance Report 2023-24 indicates an increase in pollution incidents. Despite a sector commitment to reduce pollution by 20% during 2020-2025 and aiming for a 15% reduction from 2019 to 2022, only a 2% reduction has been achieved so far. In terms of leakage, companies have only achieved a reduction of 6% on an annual basis to date, against a target of 16% by 2025. In response, the government plans to partner with investors to allocate £104 billion in 2025 to upgrade ageing pipes and construct new sewage treatment facilities to reduce river pollution. 
   

Social

• In January 2026, Ofwat launched a formal investigation into South East Water following repeated supply outages affecting homes and businesses in Kent and Sussex. The regulator is assessing whether the company breached its licence obligations on service resilience and infrastructure performance, after numerous bursts and system failures left customers without safe running water. Ofwat has warned that, if breaches are found, enforcement action, including fines of up to 10% of turnover or licence revocation – could follow.
• Energy companies are dedicated to ensuring energy affordability for low-income and vulnerable customers through government-led initiatives like the Energy Company Obligation (ECO) and the Warm Home Discount. The ECO4 programme, which runs until 31 March 2026, focuses on enhancing energy efficiency in homes, particularly for low-income and vulnerable households. This initiative aims to improve insulation and heating, reduce fuel poverty and help households save on their annual energy bills by facilitating essential home upgrades.  
• National Grid aims to support approximately 55,000 additional jobs by the end of the decade, focusing on creating green jobs to build a 'clean power army' of apprentice engineers, welders and technicians to ensure energy security by 2030. The government is advancing this effort with Regional Skills Pilots in Aberdeen, Cheshire, Lincolnshire and Pembrokeshire to enhance workforce development.
• National Grid is committed to fostering a gender-balanced, diverse and inclusive energy sector. It has set a specific target for women to hold at least 40% of middle management and leadership positions in the UK by 2030. 

Governance

• The government is planning a major overhaul of England’s water industry by creating a new regulator with stronger powers to tackle long‑standing failures in service quality, infrastructure and environmental performance. The move responds to a spate of supply outages, sewage pollution and customer complaints, following years of under‑investment and financial strain in major providers like Thames Water. The proposed body would replace existing regulators and be empowered to conduct surprise infrastructure “health checks” and intervene earlier where performance is poor. A performance improvement regime is also being considered to help struggling companies recover more efficiently. Critics argue the plans may not extend far enough, particularly on the enforcement of pollution fines or deeper structural reform of water company ownership.
• Marsh & McLennan’s UK Utilities Risk Report reveals that companies are increasingly worried about environmental, digital, workforce and investment pressures. Utilities rank policy and regulatory uncertainty, volatile weather patterns linked to climate change and cyber and security threats among their top concerns, alongside societal shifts in consumer behaviour and rising expectations for sustainability and service reliability. Companies also flagged investment and skills shortages, with a challenging labour market making it harder to attract and retain specialised talent.

Construction

Environmental

• The UK Green Building Council (UKGBC) has launched a Net Zero Carbon Buildings Framework to standardise how buildings are designed, constructed and operated to deliver genuine net zero carbon outcomes across the built environment. The framework creates clear definitions and metrics for operational and embodied carbon, setting expectations for clients, designers, contractors and investors that align with UK climate targets and science‑based pathways.

• For the construction sector, this trend signals a shift from voluntary pledges to measurable, comparable performance. Companies must embed emissions measurement into governance processes, drive down energy use through design and procurement and prioritise low‑carbon materials and construction methods. Embodied carbon, emissions from materials and construction activities, are now front and centre, influencing supply chain choices, tender evaluations and lifecycle cost assessments.

• In December 2025, the government published its Environmental Improvement Plan 2025 (EIP), setting out a comprehensive strategy to tackle nature loss, pollution and climate pressures while outlining national targets and regulatory priorities that will affect businesses across sectors, including retail, construction, finance, agriculture and manufacturing. The plan emphasises restoring habitats, improving air and water quality, reducing waste, boosting biodiversity and strengthening resilience to climate impacts. It also signals a shift toward clearer rules, stronger enforcement and accountability mechanisms to ensure progress against legally backed environmental goals.

• For UK companies, the EIP underscores rising expectations on environmental performance: companies can prepare for tighter standards on emissions, waste management, biodiversity impacts, product sustainability and supply‑chain transparency. The plan’s focus on measurable outcomes and cross‑government collaboration suggests environmental policy will play a larger role in commercial planning, procurement and compliance.

• The construction sector significantly contributes to greenhouse gas emissions through embodied carbon in materials, operational emissions and demolition waste. The Construction Leadership Council's Construct Zero programme is developing new solutions to help the industry meet the national net-zero target by 2050. A crucial goal is to transition to zero-emission vehicles and onsite equipment, aiming to eliminate 78% of diesel-operated plant from construction sites by 2035. As a result, construction companies are rapidly adopting low-carbon solutions.  

• According to Carbon Trust, the government aims for new homes to be built from 2025 to produce 75-80% fewer carbon emissions than current standards. Through the Future Homes Standard, construction companies will use low-carbon solutions like heat pumps and enhance energy efficiency in residential buildings to achieve this goal.

• To reduce embodied carbon in construction, developers are increasingly using sustainable materials. Balfour Beatty's 2024 Carbon Reduction Plan emphasises the adoption of low-carbon technologies to meet emission targets. For example, the company supports steel decarbonisation by using low-carbon EcoSheetPiles, produced with Electric Arc Furnace technology, resulting in just 370 kg CO2e per tonne – a 84% reduction compared to traditional methods. 

Social

• In January 2026, the UK construction sector launched a National Women on Site Standard, a voluntary framework designed to improve gender inclusion, fairness and safety for women working on building sites. The standard sets clear expectations for employers on matters like site facilities, anti‑harassment policies, inclusive culture, recruitment practices and career progression support –areas where women have historically faced barriers and under‑representation. By raising workforce and site standards, the framework seeks to strengthen social outcomes like diversity, retention and equitable opportunity.

• The construction sector faces severe labour shortages, with over 35,000 job vacancies, according to ONS data. More than half of these vacancies go unfilled due to a skills gap, threatening the government's goal of delivering 1.5 million homes during this parliament. To address this, the government plans to train up to 60,000 more engineers, bricklayers, electricians and carpenters, supported by £100 million for 10 new Technical Excellence Colleges and £165 million to expand construction courses in existing colleges.  

• According to the Construction Industry Training Board's (CITB) Labour Market Intelligence Report for the 2025-2029 period, the construction sector will require an additional 47,860 workers annually. Over the five years, this equates to a total of 239,300 new workers needed. To support this demand, the CITB has announced a £39 million investment in the National Construction College at Erith and other sites. This investment will significantly enhance the industry's value by expanding the training offerings available. 

Governance

• The UK’s Financial Conduct Authority (FCA) has launched a formal consultation on proposals to make environmental, social and governance (ESG) ratings more transparent, reliable and comparable, marking a significant governance shift in how sustainability performance is assessed and used in markets. ESG ratings influence investment decisions, capital allocation and risk management, but users have expressed concerns about inconsistent methodologies, conflicts of interest and limited transparency in how scores are derived.

• The FCA’s proposals would apply existing regulatory standards to ratings providers and introduce tailored rules on governance, systems and controls, conflicts of interest, stakeholder engagement and disclosures, aiming to build market trust and comparability.  The consultation, open until 31 March 2026, follows government legislation bringing ESG ratings within the FCA’s remit, with final rules expected by late 2026 and the regime to take effect by June 2028.

• In April 2025, the National Infrastructure and Service Transformation Authority (NISTA) was established to streamline major infrastructure projects and implement a 10-year UK Infrastructure Strategy, with at least £735 billion in funding. NISTA offers clearer governance, improves accountability and ensures predictable planning. It also reforms project commissioning and procurement to align contracts with public strategy and goals.

• The Grenfell tragedy prompted significant changes in building safety, mainly through the Building Safety Act 2022, which enhances measures for high-risk buildings. This legislation established three new oversight bodies. The Building Safety Regulator oversees the safety and performance of all buildings, promoting competencies within the sector, including for building control professionals and tradespeople. The National Construction Regulator manages a stricter construction products regulatory regime, ensuring market surveillance and enforcement. The New Homes Ombudsman Scheme provides new-build homeowners with a platform to escalate complaints. These changes aim to improve accountability, risk management, compliance and enforcement, requiring construction companies to prioritise safety and transparency across all project stages. 

Retail & Wholesale Trade

Environmental

• Retailers are under growing pressure to address their impact on nature and biodiversity, as new data shows most lack clear targets or strategies. A 2025 report from the British Retail Consortium revealed that over 75% of retailers have no public biodiversity goals and two-thirds lack a structured, data-led plan to manage nature-related risks across supply chains.
• With global biodiversity loss accelerating, inaction poses material risks, from supply chain disruption to long-term resource scarcity. Retailers depend on healthy ecosystems for raw materials, food production and water security, yet many are still in early stages of integrating nature into ESG strategies. Industry leaders are calling for stronger governance frameworks and nature disclosures. Meanwhile, government policy like the updated Environmental Improvement Plan is expected to raise expectations. Biodiversity is becoming a critical ESG factor, closely tied to operational resilience, investor confidence and regulatory alignment.
• A new December 2025 BRC net zero stocktake shows UK retailers are making progress on climate commitments, but action remains uneven across the sector. Many major chains have set net zero targets and are reducing emissions from energy use, transport and buildings, yet fewer are addressing Scope 3 emissions, those embedded in supply chains and products. Retailers report barriers including data gaps, supplier engagement challenges and investment constraints in lowering embodied emissions. The report also highlights notable efforts: energy efficiency upgrades, decarbonised logistics, renewable power procurement and waste reduction initiatives demonstrate how environmental strategies can cut costs while shrinking carbon footprints. However, smaller and mid‑size companies lag, often lacking resources or tools to fully measure and manage their climate impacts.

Social

• UK retail employment has slumped to record lows, with the Office for National Statistics reporting around 74,000 fewer jobs year‑on‑year and 355,000 fewer than a decade ago in September 2025. The British Retail Consortium (BRC) describes this decline as a “loss of opportunity” for local communities and young people, highlighting that retail roles often serve as first jobs, part‑time work for parents and carers and flexible entry‑points into the workforce.
• The fall in both full‑time and part‑time positions underscores broader pressures on the sector, including rising labour costs from higher employer National Insurance and minimum wage increases and potential changes to employment law that could reduce flexibility. Retailers warn that this trend not only weakens community employment prospects but threatens the sector’s ability to recruit and retain staff, with knock‑on effects for customer service, local economies and consumer spending. The BRC is urging the government to refine policy, particularly the Employment Rights Bill, to protect flexible job creation while supporting responsible employment.
• Proposed changes to the UK Employment Rights Bill are sparking concern across the retail sector, as new measures could unintentionally threaten job flexibility and availability. Reforms such as day-one unfair dismissal rights and mandatory guaranteed hours aim to protect workers, but risk reducing opportunities for part-time, entry-level and seasonal roles that are vital to the sector. Rising labour costs and automation are already contributing to long-term job losses; inflexible employment rules may accelerate this trend, particularly for small and mid-sized retailers. The debate reflects a broader ESG challenge: how to safeguard fair working conditions while preserving inclusive job access and supporting local economies through sustainable employment models.

Governance

• The British Retail Consortium (BRC) has criticised the UK Government’s recent business rates reforms as insufficient to address long‑standing structural issues in the taxation system for retail and high‑street businesses. Retailers have pointed out that business rates remain disproportionately burdensome, hitting high street shops heavily and undermining investment, expansion and cost competitiveness, particularly for larger stores that already shoulder a significant share of total rates. Industry groups warn that without deeper reform, persistent high costs will constrain growth and erode profitability, with knock‑on effects on jobs and local economies. Broader industry and government discussions continue around potential further relief measures and targeted support as part of ongoing fiscal policy debates.
• UK and global retailers are entering a new era of ESG regulatory expectations and greenwashing risk – a major driver behind this shift is Provision 29 of the UK Corporate Governance Code, which took effect in 2025. Stakeholders are increasingly sceptical of vague environmental claims and superficial sustainability messaging. New rules and enforcement mechanisms require that sustainability claims be substantiated with credible evidence, while regulators and watchdogs are primed to act against misleading advertising and product labelling. Failure to meet these expectations can result in enforcement action, reputational damage or fines under strengthened consumer protection laws.
• Rising consumer awareness and investor demand for genuine environmental performance are driving retailers to move beyond marketing and embed robust environmental governance, transparent reporting and product lifecycle accountability into core business practices. Examples include aligning marketing claims with verifiable carbon reduction data, auditing supply chains for sustainability performance and training marketing and compliance teams to avoid misleading language.

Transportation & Warehousing

Environmental

• According to the Department for Energy Security & Net Zero, surface transport is the UK's largest source of greenhouse gas emissions, accounting for 25% of the total. Cars contribute 59% of this, HGVs 19% and vans 18%, with smaller amounts from buses, motorcycles and rail. For the 7th Carbon Budget (2038-2042), the Climate Change Committee (CCC) projects that surface transport emissions must drop by 86% from 2023 levels by 2040. On 6 January 2026, the government opened a consultation on a new HGV CO2 emissions regulatory framework for the UK, considering regulatory options to reduce emissions from HGVs, support phasing out the sale of new non-zero emission HGVs weighing up to and including 26 tonnes by 2035 and phase out the sale of all new non-zero emission HGVs by 2040.
• As the transport sector progresses toward decarbonization and the 2030 deadline for phasing out new petrol and diesel car sales, the UK government has ramped up investment in electric vehicle (EV) charging infrastructure. In the Autumn Budget 2025, the government announced an extra £1.5 billion for the shift to electric, including £1.3 billion to increase funding for the Electric Car Grant, alongside an additional £200 million to accelerate the rollout of chargepoints across the country.
• In 2025, the Science Based Targets initiative (SBTi) validated Transport for London’s (TfL) near- and long-term greenhouse gas emission reduction goals. Aligned with the Paris Agreement's goal to limit global warming to 1.5 degrees Celsius, TfL aims for a 90% reduction in carbon emissions (Scope 1 and Scope 2) across its operations by 2030 and 45% Scope 3 reduction by 2030.

Social

• The 2025 Women in Transport Equity Index reveals that women represent 27% of the sector's workforce. The Diversity, Equity and Inclusion (DEI) score has dropped to 47% from 50% in 2023. Moreover, 59% of transport organisations report a gender pay gap of 11% or more, with 65% of UK organisations lacking plans to address this issue, up from 44% in 2023. Women in Transport is urging the Government, industry leaders and regulators to take urgent action, including mandating gender and ethnicity pay gap audits.
• The UK’s Rail Minister has warned of growing driver shortages across train operators, urging companies to step up recruitment to avoid disruption. Of the 27,000 licensed train drivers in Britain (excluding Northern Ireland), the ASLEF union estimates that around 22% of passenger drivers are due to retire within the next five years, raising the risk of widespread service shortages and increased pressure on operators to train new staff.
• The warehouse sector is prioritising health and safety to ensure workplace well-being. In April 2025, the UK Warehousing Association (UKWA) partnered with Mentor Training to host an event focused on best practices in workplace safety. To further elevate standards, the UKWA has introduced a Certificate of Professional Competence for Warehouse Managers, featuring a dedicated module on workplace safety.

Governance

• On 7 January 2026, the Department for Transport opened a consultation on whether to make local transport authorities responsible for taxi and private hire vehicles (PHVs), in an attempt to address concerns about inconsistent regulations across different regions.
• In 2025, the government's Sustainable Aviation Fuel Mandate sets a goal for sustainable aviation fuel (SAF) to comprise 2% of total fossil jet fuel, approximately 230,000 tonnes. This target will climb to 10% by 2030 and 22% by 2040. To support this initiative, the government has announced an additional £400,000 in funding to help producers bring new clean fuels to market more quickly. On 22 July 2025, the Aviation Minister announced that £63 million would be distributed among 17 UK companies to boost the production of sustainable aviation fuel. This initiative aims to support 1,400 jobs and strengthen the UK's position as a global leader in the green aviation sector.
• The Passenger Railway Services (Public Ownership) Act 2024 enables the nationalisation of passenger rail services, leading to South Western Railway coming under public control in May 2025. Its operations now fall under Great British Rail, transitioning governance from private to public sector and altering ESG reporting frameworks.

Accommodation & Food Services

Environmental

• The hospitality sector is showing increased commitment to sustainability initiatives, making practices more eco-friendly. The sector’s trade body, UKHospitality, outlines the commitment to be net zero by 2040, including eliminating unnecessary single-use packaging by 2025 and reducing food waste by 50% by 2030. The trade body points to WARP’s Guardians of Grub campaign, which states that wasted food is costing the sector £3.2 billion a year, while 75% of the wasted food could have been eaten. Some are using advanced technology to achieve greater efficiency. For instance, Marriott Hotels has rolled out Winnow AI across UK, Ireland and Nordics hotels, achieving a food waste reduction of 25% in the first half of 2024, with a target of reaching 50% reduction in 2025.
• According to Biffa’s report on the UK Hospitality sector and sustainability in 2024, published in December 2024, 91% of businesses have a sustainability strategy in place or in planning. It also highlights that 66% of hospitality SMEs measure food waste, compared to only 41% of corporate-sized hospitality businesses. Further, 90% of businesses say they’re focused on the circular economy.
• As part of the government’s Plan for Change, the Department for Energy Security and Net Zero is trialling an initiative to provide over 600 SMEs in the hospitality sector with free energy and carbon reduction assessments, saving the hospitality sector £3 million on bills.

Social

• Hospitality businesses are some of the worst affected by recent tax and wage changes. The Autumn Budget 2025 revealed that the National Living Wage will rise by 4.1% in April 2026 to £12.71 for those aged 21 and over, while the wage rate for 18- to 20-year-olds will climb by 8.5% from £10 to £10.85. These increases are higher than many expected, putting severe pressure on the hospitality sector, which is already experiencing significant labour troubles.
• UKHospitality notes that overall, the wage increases announced in the Budget represent a total of £1.4 billion in additional costs for the hospitality sector, which it states will ultimately be passed on to the consumer, as hospitality businesses have reached their cost absorption limit.
• A report by Zonal, in partnership with CGA by NIQ and UKHospitality, has found that 68% of British consumers say hospitality plays an important role in their communities, while 74% agree the industry needs and deserves greater support from the government.
• Data from the ONS reveals that wage growth in the accommodation and food services sector was below the average across all sectors, climbing by just 3.9% in April 2025 compared with April 2024. This comes as hospitality businesses were preparing for tax hikes in April 2025, with many cutting headcount and reducing workers’ hours. Meanwhile, the vacancy rate in the sector was 13.7% lower in October to December 2025 compared with the same period in 2024, indicating cautious recruitment efforts amid heightened staff-related costs.
• The sector is heavily reliant on young workers. Biffa’s report on the UK Hospitality sector and sustainability in 2024 reveals that workers aged 16 to 24 years make up around 50% of employees in some hospitality roles, including waiters and waitresses (50%), bar staff (48%) and coffee shop workers (48%). However, there has also been a rise in the number of older individuals working in the sector – about a third of workers were over the age of 50, according to the report.

Governance

• The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024. Under the legislation, food and drink establishments are required to pass 100% of service charges to staff.
• In the Autumn Budget 2025, the government announced the introduction of two permanently lower business rates multipliers for eligible hospitality properties with rateable values below £500,000 from April 2026, with these rates 5p lower than the national multipliers. However, UKHospitality claims that even with the reduced multiplier, business rates for small hospitality venues will climb by £318 million over three years (2026/27 to 2028/29), with a 76% rise for the average pub and 115% for the average hotel over the period. The British Beer and Pub Association has called on the government to introduce a 30% pub-specific business rates relief in a bid to prevent a severe wave of closures and up to 15,000 job cuts.
• On 22 July 2025, the government raised the minimum salary requirements for the Skilled Worker visa to £41,700. Previously, the threshold was hiked from £26,200 a year to £38,700 a year from April 2024. This is placing further labour pressures on the already strained hospitality sector.

Information

Environmental

• Given the amount of energy requirements, the telecoms sector is increasing its efforts to reduce waste and consumption. Larger operators have set various sustainability targets, like Vodafone’s aim to cut carbon emissions from UK operations to net zero by 2027, investing millions in the process. It reported the use of 100% renewable electricity, alongside ongoing fleet electrification. Similarly, telecom giant BT unveiled its Climate Transition Plan 2025 at the end of March 2025, aiming to reach net zero across its full value chain by March 2041.
• Under Defra, the UK government released a report in January 2025 on the progress of its Greening Government ICT commitments, as outlined in the Greening Government Commitments 2021 to 2025 framework. It states that emissions from government IT dropped by 9% in 2023 and 2024 compared to 2022 and 2023 levels, while e-waste in 2023 and 2024 dipped by 17% from 2022 and 2023. In July 2025, the Government Digital Sustainability Alliance introduced a new recommendations paper for government on the circular economy, advocating reuse, refurbishment and recycling of devices, with hardware disposal becoming a bigger footprint source.
• Prominent UK broadcasters like the BBC and Channel 4 have reaffirmed their sustainability commitments, with targets of reaching net zero by 2030.

Social

• The Financial Times reports that UK Chancellor, Rachel Reeves, has written to the leading UK telecoms to demand more protection for consumers from mid-contract price rises. This comes after Virgin Media O2 announced it would hike prices for its mobile customers by £2.50 a month from April, despite previously stating the increase would be £1.80. Meanwhile, Ofcom has fined Virgin Media £23.8 million for failing to protect vulnerable people when switching them from an analogue to a digital landline.
• The information sector is still lagging behind others when it comes to workforce diversity. According to the Diversity in Tech: Landscape Research Findings report from December 2024, women comprise only 21% of tech teams. Meanwhile, only 9% of tech employees come from lower socio-economic backgrounds, highlighting the need for the sector to do more in this regard and fix these gaps. A recent report by Manchester Digital in partnership with ECOM, the 2025 Sector Insights Report, reaffirms this by stating that “diversity at leadership levels remains low”, urging for more action.
• Skills gap in technology is a major topic, particularly given the significant pace of technological innovation. Cyber security skills in the UK labour market 2024 research, published in September 2024 by the Department for Science, Innovation and Technology, states that approximately 390,000 businesses (27%) have gaps in advanced skills – skills that aren’t outsourced and are considered important. It also estimates that 30% of cyber firms in 2024 have faced a problem with a technical skills gap, which is a worrying number given the growing prevalence of cyber attacks. Nonetheless, this figure is lower than the estimated 49% in 2023. It is also worth noting that the skills gap for cryptography and communication security has increased from 12% in 2023 to 24% in 2024. The National Audit Office also highlights that one in three cyber security roles in government were vacant or filled by temporary staff in 2023-24. Similarly, Manchester Digital’s 2025 Sector Insights Report on the Greater Manchester’s tech sector highlights that 80% of respondents say AI skills are now essential. This is likely to be the picture for the tech sector across the rest of the country.

Governance

• The government introduced the Cyber Security and Resilience Bill to Parliament in November 2025. The Bill will reform and add to the existing Network and Information Systems (NIS) Regulations 2018, to increase UK defences against cyber-attacks, better protecting the services the public rely on to go about their normal lives. This will translate into stronger governance requirements for the sector.
• The Data (Use and Access) Act 2025 (DUAA), which is planned to be phased in between June 2025 and June 2026, changes data protection laws in order to promote innovation and economic growth and make things easier for organisations, while still protecting people and their rights. DUAA amends, but doesn’t replace, the UK General Data Protection Regulation, the Data Protection Act 2018 and the Privacy and Electronic Communications Regulations. As such, companies in the sector must strengthen internal governance to ensure transparency, accountability and trust in data handling practices.
• An investigation by The Guardian revealed in January 2026 has found that major tech companies have held over 639 meetings with UK ministers up to October 2025, far more than child safety groups, raising questions about disproportionate corporate influence on policy and regulatory frameworks.

Finance & Insurance

Environmental

• In December 2025, the Prudential Regulation Authority (PRA) published an updated Supervisory Statement (SS5/25) and accompanying policy guidance setting clearer expectations for how banks and insurers must identify, manage and govern climate‑related financial risks across their businesses. Companies are now expected to embed climate risks into core governance, risk‑management frameworks, board oversight and strategic planning, ensuring these risks are handled with the same rigour as traditional financial risks. Boards must review material climate exposures, use robust data and climate scenario analysis and document how decisions reflect risk appetite. Companies are urged to take a proportionate approach reflective of their exposure and business model, with responsibilities clearly assigned to senior management.
• Governance of environmental risk weakens at the Bank of England. In June 2025, in a candid reflection on environmental governance, several senior staff at the Bank of England stepped down from climate and nature-risk roles after observing a significant downgrade in the institution’s prioritisation of environmental threats. These resignations underscore a growing tension between the escalating urgency of ecological emergencies and the perceived retreat in supervisory focus within one of the UK’s most influential financial institutions. The departures signal a worrying trend – as central bankers shift away from environmental stewardship, financial stability may be undermined by blind spots in the oversight of climate-related and biodiversity risks. This erosion of environmental governance could hamper efforts to mitigate the systemic threats posed by the climate crisis and raise questions about the resilience of regulatory frameworks across the UK’s finance and insurance sectors.
• A wave of high‑profile departures from the UN‑backed Net‑Zero Banking Alliance (NZBA) has been set in motion, with UK giants HSBC and Barclays followed by Switzerland’s UBS. These banks cite the diminishing effectiveness of the alliance – after many global peers have quit – as rendering the group "no longer fit for purpose". Yet all reaffirm their individual commitment to reaching net‑zero by 2050, emphasising they now possess in‑house capabilities to meet climate goals independently. Initiating a collective climate initiative raises questions about the resilience of voluntary alliances and the sincerity of long-term ESG strategies. Climate credibility used to lean on shared targets and peer validation, but it now rests on firms’ own methodologies –heightening the importance of transparency and accountability. Investors, regulators and clients may also demand more rigorous, evidence-based roadmaps and independent validation in place of group affiliation cues. 

Social

• UK financial and insurance firms have made modest progress in narrowing the gender pay gap, but the sector still lags wider economy norms and faces structural challenges. Latest analysis shows the median hourly gender pay gap in financial services remains around 20‑21%, with some companies reducing their gaps by one to two percentage points since mandatory reporting began, but many still report wide disparities, particularly at senior levels.
• Women are significantly underrepresented in the highest pay quartiles, contributing to persistent gaps in both pay and bonus outcomes. Mandatory gender pay gap reporting has been a key governance tool, encouraging transparency and targeted action. Some organisations have employed data-driven strategies to track and address pay imbalances and sector initiatives like the Women in Finance Charter support recruitment and retention goals.
• In November 2025, the UK government launched a Financial Inclusion Strategy aimed at tackling barriers that prevent people from fully participating in the financial system, from access to banking and savings to credit, insurance and money management. The plan seeks to help underserved groups, including people experiencing homelessness, survivors of domestic abuse and families without savings, gain access to basic financial services and build resilience against economic shocks. A key element is a pilot enabling people without standard ID to open bank accounts, backed by major banks working with charities. It also includes measures to expand affordable credit and support household savings schemes. The strategy promotes financial education in schools and stronger support for those in problem debt, reflecting concern that financial exclusion contributes to inequality and economic instability. Government and financial industry bodies are partnering to remove structural barriers and expand digital and physical access points for essential services. The initiative has drawn scrutiny from MPs and campaigners who stress it must translate into real change, not just policy rhetoric.
• Pay parity in UK finance is not expected until 2038. Women across UK financial and insurance services earn significantly less than men – on average, just 78 pence for every pound paid to men, Bloomberg and Government data reports in 2025. Despite marginal gains year‑on‑year, progress remains painfully slow, with pay parity not expected until around 2038. While investment banking shows the largest reported pay gaps, insurance firms are also grappling with long-standing disparities in pay and representation. Despite continued participation in initiatives like the Women in Finance Charter, some firms failed to meet their internal diversity targets in 2024. Around 20 financial services companies, including insurers, cited hiring freezes and organisational restructuring as key reasons. These figures underscore systemic inequalities: women are under‑represented in senior roles – across the FTSE 100, women make up 23% of chief financial officers, chief operating officers, divisional bosses or are already chief executives. This under‑representation compounds pay disparities, reflecting both persistent occupational segregation and barriers to advancement. Persistent inequalities can erode morale and tarnish the reputation of institutions, making it harder to attract and retain female talent. With voluntary efforts faltering, regulators and stakeholders may demand stronger accountability through mandatory reporting, targets and links between executive pay and diversity performance.
• In March 2025, the UK’s Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) abandoned plans to introduce mandatory diversity and inclusion (DEI) rules for financial firms. This U-turn comes after industry objections citing regulatory burdens and costs. Critics warn that stepping back from enforceable DEI standards risks undermining progress toward inclusion and may embolden firms to deprioritise representation efforts. The move mirrors a trend seen in the United States, where DEI initiatives have faced political backlash. Without compulsory DEI reporting or targets, underrepresentation of women and minorities may persist – or even worsen. Firms now have less external pressure to act on equity, reducing accountability. Despite this shift, regulators emphasise they still intend to address non‑financial misconduct, including harassment and bullying, by mid‑2025 –   signalling continued focus on culture, if not on formal DEI mandates.
• UK financial services staff suffer above-average health decline. 2024 research by Unum UK underscores a pressing issue: UK financial services employees face significantly more health-related challenges than their counterparts across other industries. Around 38% reported worsening physical health last year, compared to just 24% across the UK economy and 37% took time off for general health issues, surpassing the national average of 29%. In response, over half of these firms plan to increase investment in employee well-being this year. Wellbeing is fast becoming a critical KPI- not merely optional. Firms lagging in this area risk reputational damage or falling behind in ESG and HR standards. This signals a growing recognition that nurturing staff health is essential – not just ethically but strategically, as poor wellbeing erodes performance, morale and resilience across the sector. 

Governance

• Legal analysis by K&G Gates shows climate change litigation is expanding beyond governments to target companies, boards and financial institutions, creating fresh legal and insurance risks that UK banks and insurers must confront. Cases alleging “climate‑washing” or misleading environmental claims are among the most common strategies used by claimants to hold organisations to account for environmental assertions, even as litigation targeting private actors grows. Approximately 20% of climate cases filed in 2024 were against companies and their directors and officers, highlighting the risk of liability for corporate conduct and disclosures. Beyond greenwashing, broader litigation globally is diversifying, with claims linked to climate impacts and governance practices.
• UK policymakers are urging financial regulators to lift the lid on artificial intelligence governance across banks, insurers and other financial firms after a “hands‑off” stance left potential risks under‑supervised. A cross‑party group of MPs highlighted concerns that AI systems are increasingly used in credit decisions, trading, customer service and compliance functions, but with limited regulatory oversight or standards to ensure safety, fairness and accountability. The warning comes amid broader anxiety that AI adoption is outpacing institutional controls, potentially amplifying operational, conduct and systemic risks. MPs are pressing bodies like the Bank of England, Prudential Regulation Authority and Financial Conduct Authority to set clearer expectations on AI risk management, transparency, model validation and governance frameworks.
• The Bank of England’s Prudential Regulation Authority (PRA) has confirmed that since 1 December 2025, the Financial Services Compensation Scheme (FSCS) deposit protection limit will increase from £85,000 to £120,000 per eligible depositor, per bank. The change is designed to align the UK with other major jurisdictions, enhance financial stability and protect a greater share of individual and small-business savings in the event of bank failure. It comes amid ongoing concerns about inflation, cost-of-living pressures and confidence in financial institutions. For the financial and insurance sector, the higher cap strengthens governance and risk frameworks by improving depositor safeguards, reducing systemic risk and setting clearer expectations for crisis readiness. Banks and building societies will need to reflect the change in customer communications, risk disclosures and contingency planning.

Real Estate & Rental & Leasing

Environmental 

• Energy-efficient buildings bring more returns for investors. Expected upcoming changes to the Minimum Energy Efficiency Standards for non-residential property, like implementing EPC C by 2027 and B by 2030, will raise the “risks to value” in relation to energy inefficient property. CBRE’s Sustainability Index 2024 shows that since the index started in Q1 2021, energy-efficient commercial property assets have recorded total returns of 16.2% compared with 11.2% for inefficient ones. CBRE’s H1 2025 update shows that returns for efficient buildings across all types of property stood at just over 20%, compared to just over 15% for inefficient ones (with the gap in returns for industrial assets reaching the largest in the index’s history), amid “increasing appetite for energy efficient assets from both investors and occupiers”. According to JLL, in 2025, about 40% of the UK office development pipeline is targeting net zero, with low-carbon buildings becoming standard and asset owners having to upgrade existing building stock to remain competitive and meet rising market expectations.
• According to the Centre for Cities, about 12% of commercial properties in the UK missed an energy rating deadline in 2023, with buildings in the UK facing stringent deadlines to upgrade energy efficiency ratings by the end of the decade, as reported by the Financial Times. An article by the Financial Times from October 2024 has stated that a significant amount of property assets face being “stranded”, echoing comments made by former central banker Mark Carney, with substantial costs for upgrading buildings to required standards. In its 2023-24 reports, British Land stated that retrofitting its portfolio would cost £100 million to meet EPC ratings of A or B by 2030. It is making progress on that front, with 72% of its portfolio rated EPC A or B in its H1 2025-26 update, up from 68% for 2024-25. Meanwhile, Land Securities launched a £135 million net zero transition investment plan in November 2021. Knight Frank estimates from September 2024 showed that circa 70% of floor space in England and Wales had an EPC rating of C or below. As such, the Financial Times estimates that about £700 billion worth of non-residential building stock is at risk.
• Knight Frank’s ESG Property Investor Survey 2025 has found that 69% of respondents cited internal net-zero commitments as a key driver of their ESG investment strategy. Meanwhile, retrofitting leads as the primary ESG-related investment approach, with 76% of respondents prioritising upgrading existing assets. 41% recognise securing funding as a motivation for ESG due diligence. Further, the 2025 Knight Frank (Y)OUR SPACE report, which captures the views of respondents directly managing some 650 million sq ft of space globally, found that just 18% listed sustainability and ESG commitments among their top three priorities. It reveals that in London, lettings of new or refurbished office space (typically achieving or targeting a minimum EPC B rating) reached a record high in Q2 2025, with 2.6 million sq ft signed, over 74% of total leased space.

Social

• Women in the real estate sector remain underrepresented in senior leadership positions at agencies. According to Deloitte, in April 2024, women represented just 14.5% of the total positions at the C-suite level. Many women are facing barriers to progression and are leaving the sector amid career stagnation, inflexibility and male-dominated cultures.
• Gender pay differences are also prevalent. JLL’s 2025 report states that while pay gaps are narrowing, the real estate sector shows larger gaps than other industries. Analysis of top firms by Property Week from April 2024 found that the median gender pay gap was 22.8%, down from 24.8% in 2022.
• Continuously rising rents across the UK are causing severe pressure on tenants, particularly younger and older people who have squeezed budgets, with properties in the UK becoming unaffordable. According to data from the ONS, on average, the share of private rent of household gross income reached 36.3% in 2023-24, up from 33.1% in 2022-23 and above the 30% threshold that it defines as affordable. This points toward worsened housing affordability in England.

Governance

• Net-zero mandates and growing sustainability regulation targets are putting pressure on the sector. The government has announced proposals to amend the Minimum Energy Efficiency Standards, with a target for commercial buildings to achieve an Energy Performance Certificate (EPC) rating of B, potentially as of April 2030. Analysis by CBRE from 2022 found that around 60% of commercial stock could fail to comply with the 2030 deadline, highlighting the challenge for properties to meet the target in time. It also estimates that 58% of office stock, in terms of square feet, in Central London has EPC ratings below B.
• The Renters’ Rights Act received Royal Assent on 27 October 2025. It is set to transform the market and introduce increased protections for tenants, like the removal of “no fault” evictions, causing many landlords to exit and drawing some criticism from the real estate market. A survey of 250 UK letting agents by Alto has found that 70% have seen some of their landlords already selling off properties, while 93% were concerned about losing independent landlord clients directly as a result of the reforms. An exodus of landlords could create a drop in supply, putting upward pressure on rent prices and causing further controversy. Meanwhile, pointing towards increased regulation in the residential segment, the Financial Times reports that planned government reforms aimed at speeding up house sales and curbing failed transactions will see homebuyers getting upfront transparency about problems with properties on the market and the option of binding contracts.
• Property assets with strong ESG credentials and transparent governance attract the most investment. The UK ranked first in the JLL Global Real Estate Transparency Index 2024, the global real estate industry’s most widely used benchmark for assessing market transparency and guiding cross-border investors, lenders, developers and occupiers of real estate. The UK ranked first in four out of the six factors, including investment performance, listed vehicles, regulatory and legal, and transaction process. Markets showing the greatest transparency will continue to pull ahead and be favoured by investors. 

Professional, Scientific & Technical Services 

Environmental

• Analysis from a survey of 100 UK-based law firms by Greenarc reveals that only about 51% of legal firms listed sustainability as a priority and 66% claimed they had sustainability targets in place. However, this lags behind other areas, with 92% of firms placing cybersecurity as the top focus area, followed by cost management (81%) and digital transformation (68%).
• Within the professional services sector, sustainability initiatives are of growing importance as sustainability commitments and performance help attract and retain clients and talent. Failure to set out a clear sustainability strategy could result in reduced competitiveness. A July 2025 report on sustainability and ESG in the top 50 UK law firms by Saffery states that 48 out of the 50 firms have set climate-related goals, though just nine have committed to carbon reduction by 2030 or net zero by 2050. However, the report also highlights that 34% of all firms still don’t publish an annual Responsible Business report and just 14% have conducted a sustainability materiality assessment.
• Accounting firms have also stepped up their game to showcase strong environmental commitments. For instance, in its 2024 UK Sustainability Report, Forvis Mazars brought forward its net zero emissions target across its operations and value chain from 2050 to 2045, highlighting its strong commitments to ESG. According to NatWest’s Accountancy Benchmarking Report 2024, 41% of firms stated ESG issues were regarded as a moderate priority, while 36% stated it is one of their stronger priorities.

Social

• With evolving ESG reporting regulations, accounting firms face growing responsibilities and pressure to meet requirements. However, various reports state that there is a growing shortage of skilled accountants in the UK, which could pose a potential challenge for firms to manage these increasingly complex reporting regulations. ICAEW’s Mid-Tier Evolution report from July 2025 states that 43-44% of firms ranked future‑proofing skills among their top three talent challenges and that 75% rated investment in upskilling existing staff as a high priority for their operating models over the next three years. Given the skills gap in the industry and firms’ changing needs, ICAEW has announced it will update its ACA qualification from September 2025 to address evolving demands in business, finance and accountancy.
• Pay gap and female representation issues continue to plague the professional services sector, with law firms, consultancies and accounting firms often scrutinised. The Financial Times reports that a study by the International Bar Association on 170,000 lawyers across five continents shows women make up 47% of all lawyers, but account for only 38% of lawyers in senior positions. The gap between women in the profession and those in leadership positions is particularly pronounced in England and Wales. Two of the Big Four accounting firms, EY and PwC, are set to fall short of their 2025 targets for female partner representation in the UK. While Deloitte and KPMG have already met their UK targets, the two firms are on track to miss their global partnership targets. The Big Four have all set targets to increase their proportions of female partners, which would help in reducing their gender pay gaps.
• The UK legal market has endured significant labour pressures, with intense competition for talent. The Financial Times reports that Magic Circle firms offered 20% pay increases to junior lawyers last year in an effort to overcome competition from US firms’ London offices. A 2025 study by OneAdvanced found that 32% of law firms placed talent attraction and retention as a core business priority for the next year. Meanwhile, a survey of 1,680 lawyers at 110 top UK law firms conducted by legal rankings company Chambers and Partners found that two in five associates plan to leave their jobs in the next five years amid significant stress and insufficient support from their employers.

Governance

• The accounting industry continues to face regulatory changes. The Financial Times reports that the government is “exploring scrapping promised stricter audit rules for private companies” as it seeks to lessen the burden on companies in an attempt to boost economic growth. It reports that the government is discussing “ditching a measure that would force the Big Four accounting firms to share audits of the largest companies with smaller firms”. Previously, accounting firms have been sceptical of the proposed shared audits, claiming it would hike fees and could duplicate work. Meanwhile, from 1 September 2025, accountancy firms face a new regulation called Failure to Prevent Fraud, which comes under the Economic Crime and Corporate Transparency Act. It makes organisations criminally liable if an employee or agent commits fraud for the company’s benefit, unless it proves it had reasonable fraud prevention procedures in place at the time.
• The Financial Reporting Council (FRC) has ordered audit firms to disclose approaches from private equity (PE) amid a trend of PE firms investing in the UK accounting industry and the potential risks this brings, including eroding audit firms’ independence in auditing large companies’ accounts, as per the Financial Times. AccountancyAge’s Top50+50 Accountancy Firms 2024 survey has found that 35% of firms in the top 100 have bought or sold a firm in the last 12 months, while a 2025 report by chartered accountancy body ICAEW exploring the evolution of mid-tier firms, 86% of respondents ranked private equity as one of the top three macro trends impacting the profession, up from 57% in the prior year. Additionally, 25%% of firms said they had secured private equity investment (up from 12% in 2024), while another 25% said they would like to secure PE investment in the next three years through 2028 (up from 12% in 2024), highlighting the substantial activity in the market.
• Accounting firms continue to face pressure from the industry regulator, the FRC, to raise the quality of audits. Some of the recent investigations and fines for big firms include EY being investigated over its audits of the Post Office in the period 2015 to 2018 and Deloitte’s audit work on Glencore plc for the period 2013 to 2020. Nonetheless, according to the FRC’s Annual Review of Audit Quality 2025, 86% of the 104 audits inspected required no more than limited improvements, a marked increase from the 74% in 2023-24 and a step forward in terms of audit quality. However, some still lag behind, with BDO being singled out. Many firms are adopting advanced tech to help boost audit quality. However, as reported by AccountancyAge, the FRC has raised concerns that the Big Four audit firms in the UK, alongside challengers like BDO and Forvis Mazars, have introduced AI and automated tools into their workflows without formally assessing the effects on audit quality.

Education

Environmental

• The UK government’s Department for Education required all schools, colleges and other education settings in England to have a Climate Action Plan in place by September 2025, complete with sustainability leads and strategies for reducing emissions and improving energy efficiency in line with net zero goals. This is a significant environmental and operational expectation for the sector. Education settings must appoint a sustainability lead to drive climate planning, monitor progress and engage the community. Plans include emissions reductions, infrastructure upgrades and integrating sustainability into learning where feasible. This creates a formalised obligation for educational institutions to broaden their ESG footprint beyond voluntary action and begin embedding sustainability into governance and operational practices.
• The Public Sector Decarbonisation Scheme (PSDS) continues to be a vital grant avenue for schools aiming to install energy-efficient upgrades – like heat pumps, solar arrays and electric heating systems. In June 2025, the UK government confirmed that no new funding will be allocated to the Public Sector Decarbonisation Scheme beyond projects already awarded, even as it heralds continued support for ongoing initiatives through Salix Finance. This decision follows the latest Spending Review and leaves both local authorities and public organisations without further support for new energy‑efficiency or low‑carbon projects beyond the current pipeline. Launched in 2020 and administered by Salix Finance on behalf of the Department for Energy Security and Net Zero, the scheme has disbursed over £3.5 billion across nearly 1,400 grants, supporting measures like low‑carbon heating, improved insulation and other energy‑saving upgrades in public estates. While over £1 billion remains earmarked for investment across Phase 3c (until March 2026) and Phase 4 (until March 2028), no new projects beyond this timeframe will receive backing.   

Social

• In January 2026, the UK government abandoned its target of recruiting 600,000 international students a year to UK campuses, instead pivoting to a strategy that promotes overseas education hubs and global partnerships to grow “education exports” to around £40 billion by 2030. This marks a significant policy shift in higher education and workforce planning. Under the new approach, universities and colleges are encouraged to establish campuses and partnerships abroad, while stricter visa compliance measures will ensure that students coming to the UK are genuine learners.
•  Low pay and excessive workloads undermine teacher retention. A recent cross-country review spearheaded by Universitas 21 and supported by the University of Nottingham reveals a mounting social challenge in education. Low pay, heavy workloads and diminished professional status are driving sustained teacher shortages in the UK, a study by Universitas 21 and the University of Nottingham reveals. The report emphasises that while many governments and education authorities have introduced pay rises, incentive payments, bursaries and workload-reduction initiatives, these efforts lack consistent impact assessments. As a result, strategies remain largely unvalidated – potentially perpetuating ineffective or inequitable policies. Crucially, the shortage of teachers is most acute in marginalised and underserved communities, notably in rural areas and within STEM and special education fields.
• Ofsted’s annual report warns that while education and social care professionals are working tirelessly under immense pressure, systemic strain is hitting vulnerable and disadvantaged children hardest, particularly those with special educational needs and disabilities (SEND), who face inconsistent support and delayed interventions due to weak partnership working, poor data use and patchy commissioning. Recruitment and retention crises across classrooms, nurseries, colleges and care settings are compounding these issues, deepening attendance gaps and leaving learning fragmented. The regulator highlights the persistence of “childcare deserts” in disadvantaged areas and a shortage of foster carers and children’s homes, with many young people placed far from families and communities due to poor geographic distribution of provision. Governance concerns extend to safeguarding, with rising flexi-schooling, unregistered settings and non-compliance with rules requiring every school to appoint a qualified SENCo. In response, the regulator reformed its own approach – scrapping one-word judgements in favour of more detailed school report cards from September 2024 and planning changes to social care inspections by 2026. This signals that governance reform must go hand in hand with addressing the root causes of inequity in education and care. 

Governance

• UK universities are facing a deepening sector-wide crisis, driven by falling student recruitment – particularly from overseas – tight government funding, rising costs and intensified competition. UCAS and Office for Students data show some universities reporting substantial shortfalls in applications, weaker finances and pressures to cut courses or staff to balance budgets. Critics warn that this trend risks undermining academic quality, research capacity and the UK’s global reputation in higher education. As part of the Budget 2025 policy, a fee levy on international students was confirmed (flat £925 per student from 2028), adding to cost pressures as universities adjust revenue models.
• Governing bodies urged to reassess oversight on fiscal leakages. Chancellor Rachel Reeves’s Treasury misjudged parental reaction to the introduction of VAT on private school fees. Forecasts estimated only £90 million of advance payments would evade tax – but in reality, parents poured a staggering £515 million into prepayment schemes across the 50 largest schools. This overwhelming response highlights a serious flaw in the policy’s design and underscores broader issues around fiscal forecasting, stakeholder behaviour and policy resilience. It also hints that there was likely inadequate risk analysis, underestimated behavioural responses and gaps in regulatory oversight that allowed significant tax avoidance. For policymakers and education leaders alike, it reinforces the need for governance frameworks that better anticipate reactions and close loopholes before policy rollout. In this case, the VAT’s revenue-generating goal is now under threat – not just financially, but reputationally, as the government is seen as out of touch with real-world incentives.
• The Office for Students (OfS) has flagged mounting financial fragility across the sector. Lower international enrolments and higher labour costs threaten university budgets, putting over 10,000 jobs at risk. Nearly 75% of institutions are projected to run a deficit in the 2025-26 academic year. The government has pitched in with £1.5 million to aid, while regulators are intensifying engagement with finance directors and lenders.

Healthcare & Social Assistance

Environmental

• Announced in September 2025, the NHS has committed to becoming the world’s first net zero health system, cutting emissions across estates, supply chains, transport and clinical care. Progress includes large‑scale energy efficiency upgrades, expansion of renewable power, greener inhalers, reduced anaesthetic gas use and lower‑carbon procurement standards over the next 10 years. Government backing through net zero policy and NHS England guidance has helped accelerate change, while suppliers are increasingly required to meet tougher carbon reporting and reduction standards. The trend signals a broader ESG transition across health and social care, where environmental performance is becoming integral to patient outcomes, system resilience and regulatory expectations.

Social

• October 2025 data showed that more NHS trusts in England are meeting national waiting time targets, marking welcome progress in elective care recovery. Several providers have significantly reduced the number of patients waiting more than 65 weeks for treatment, following targeted government funding, operational support and additional diagnostic capacity. However, improvement remains uneven across regions and specialisms, with some areas still struggling due to workforce shortages and infrastructure constraints. Disparities in access persist, particularly in more deprived communities and rural areas, raising concerns about health equity and consistent service delivery.
• The introduction of the Medical Training Prioritisation Bill has been welcomed across the UK health sector as a step toward addressing geographic and speciality workforce shortages. The proposed legislation aims to give the government powers to prioritise medical training places based on population health needs and service gaps, ensuring that investment in new doctors and clinical staff aligns with areas of greatest demand. The NHS Confederation notes this could help rebalance the distribution of healthcare workers, especially in under-resourced regions and specialisms like mental health, geriatrics and rural general practice. With ongoing challenges in staffing levels, long wait times and unequal access to care, the bill supports long-term workforce planning tied to health equity goals.
• A sustainable future for England’s health and adult social care hinges on urgent investment and systemic reform, according to a June 2025 Parliamentary Office of Science and Technology (POST) spotlight. With the NHS and adult social care sectors collectively representing around 13% of the workforce, persistent challenges are undermining workforce resilience. As of March 2024, the NHS faced 100,658 vacancies, while the adult social care sector had around 131,000 unfilled roles – excluding positions covered by temporary staff. The system is heavily dependent on international staffing, with 21% of NHS staff and 19% of social care workers hailing from overseas. Among doctors registered with the GMC, overseas-trained individuals accounted for as much as 38%. To tackle a projected shortfall of 150,000 NHS staff, NHS England’s Long-Term Workforce Plan calls for real-term budget increases of about 3.6% annually. Meanwhile, the adult social care workforce strategy has prompted government action, including an £86 million boost to the Disabled Facilities Grant, expansion of care career structures and digital integration. Despite efforts, workforce growth hasn’t matched rising demand that is being driven by an ageing population, post-pandemic pressures and growing waiting lists. And although the NHS is devolved, all UK nations face similar hurdles in staffing levels and supply chain resilience. Effective retention strategies must go beyond financial incentives, by addressing burnout, workplace culture, flexibility, professional progression and management support. Return-to-practice schemes have shown moderate impact: since 2014, around 7,978 nurses have returned to the profession, but uptake remains limited. Integrated Care Systems (ICSs) present an opportunity to synchronise workforce planning, pay, recruitment, training and performance management – enhancing efficiency and workforce stability across regions.
• GPs continue to face the highest pressures across the medical workforce. The GMC’s 2025 Workplace Experiences report reveals a cautiously hopeful picture: doctor satisfaction is on the rise, burnout is decreasing and workloads are easing for a second consecutive year. Yet, beneath this progress lies enduring pressures – patient safety concerns persist and certain segments of the workforce continue to struggle. General practitioners remain the most fatigued group. They are significantly more likely than other doctors to struggle with workload, lack time to deliver adequate care and express dissatisfaction. These are critical issues, given the drive to shift more healthcare into community settings. Training and development are also under strain as heavy workloads force some doctors to refuse training – jeopardising future leadership pipelines. Locally employed doctors, trainees and trainers report insufficient access to career progression opportunities.
• Despite notable progress in workforce diversity, the UK’s medical sector continues to face systemic inequities that disproportionately affect disabled doctors and UK-qualified ethnic minority doctors, according to the GMC’s 2025 State of Medical Education and Practice report. The report finds that in 2024, only 52% of ethnic minority UK graduates reported satisfaction with their roles, compared to 58% of white UK graduates. Burnout risks were also higher: 24% of ethnic minority UK graduates were classified as high risk, versus 18% of white UK graduates. Feelings of inclusion were similarly unequal – 74% of ethnic minority doctors felt part of a supportive team, compared with 80% of their white peers. The situation is equally stark for disabled doctors. In 2024, just 44% of disabled doctors reported job satisfaction, compared to 51% in 2023 and 61% of non-disabled doctors. Burnout risk among disabled doctors rose to 34%, significantly above the 19% recorded among non-disabled colleagues. These figures are particularly concerning in the context of a rapidly changing workforce. In March 2025, the GMC reported that female doctors now outnumber male doctors in the UK for the first time. Meanwhile, the share of black or black British applicants to UK medical schools grew from 6% to 10% between 2013 and 2022 and Asian or Asian British applicants rose from 27% to 29%. Despite these demographic shifts, lived experiences remain unequal. UK-qualified ethnic minority and disabled doctors continue to encounter bias, exclusion and lack of trust from senior colleagues – all contributing to heightened anxiety and attrition risk. The GMC has set ambitious targets: eliminate disproportionate employer referrals by 2026 and remove inequality in training pathways by 2031. Efforts include revamping medical education standards, strengthening support for educators, and building fairer, more inclusive workplace cultures. With 39% of doctors declining extra workload due to existing pressure, the report serves as a call to action for NHS trusts, employers and educators to not only recruit a diverse workforce – but to build environments where every doctor can succeed and every patient can benefit from safe, equitable care. 

Governance

• The Institute for Government’s Performance Tracker 2025 highlights persistent challenges in England’s adult social care system, revealing a wide “care gap” where access to services depends more on location and local deprivation than on individual need. Despite spending on publicly funded adult social care rising significantly in recent years – potentially approaching £30 billion in 2025-26, the increase hasn’t translated into proportionate improvements in care access or outcomes. Much of the extra funding has been absorbed by rising provider fees driven by wage and cost pressures, rather than expanding service provision. Some funding growth stems from council tax increases rather than long‑term sustainable budgets.
• The UK Parliament is progressing the Children’s Wellbeing and Schools Bill 2024‑25, a wide-ranging education and children’s policy package designed to strengthen both social support and governance in schooling and children’s services. The bill combines measures on children’s social care – including kinship care, protection and care leavers – with reforms at the school level covering breakfast clubs, pupil attendance registers, uniforms, teacher standards and school admissions. It has moved through its second reading and committee stages in the Commons, with broad cross-party support for many provisions but debates over aspects including curriculum freedoms and teacher conditions.
• The legislative effort reflects growing focus on equity and wellbeing in education: breakfast club proposals aim to tackle child hunger and attendance gaps, while registers of children not in school seek to address rising absence and disengagement. Changes to academy governance and teacher conditions indicate ongoing government attempts to balance school autonomy with accountability.

Arts, Entertainment & Recreation

Environmental

• UK museums and galleries are increasingly embedding climate action into programmes and operations, reducing environmental impacts and engaging audiences with climate-related narratives. Organisations like the UK Arts Council are supporting the creative and cultural sector to prioritise environmental responsibility in how they work – positioning environmental stewardship as an ESG priority for arts and culture.  The trend reflects rising pressure on cultural organisations to align with national net zero goals while managing escalating energy costs and climate-related risks to collections. For cultural institutions like museums, sustainability is no longer just an ethical issue but an operational one, linked to resilience, funding eligibility and long-term asset protection.

Social

• A Charity Times 2025 “year in the news” roundup highlights how UK charities – and by extension much of the arts, entertainment and recreation sector – are grappling with financial strain, falling income and volunteer shortages, while also engaging with innovation like as artificial intelligence. Rising costs, cuts and closures have forced many organisations to restructure, reduce staff or shut services amid higher demand and tougher fundraising conditions. The sector also faces pressures around recruitment and retention of volunteers, which underpin many cultural and recreational activities. Meanwhile, debates around governance and regulation, including a new Civil Society Covenant promising closer government‑sector dialogue, reflect a search for stable support and accountability.
• The UK's first sector-wide ESG survey for charities and social enterprises, run by Eastside People in partnership with ACEVO, reveals a landscape eager to engage with ESG yet trailing in implementation. Although 67% of organisations lack even a basic ESG strategy and only 3% have fully integrated one, nearly half are "considering developing" their approach, highlighting intent even if action is nascent. Social concerns dominate – staff wellbeing and flexible working rank high in priority and nearly three‑quarters of respondents already pay the Real Living Wage, despite 26% being unable to do so. Equality, diversity and inclusion are seen as critically important (99% say so), though most remain at “starting out” or “developing” stages. On governance, while many organisations prioritise board development, only 48% of larger charities (with more than £1 million in income) conducted an external board effectiveness review in the past three years and 37% still have trustees exceeding the recommended nine‑year tenure. Environmental progress is slow, with 10% rating themselves as advanced in managing environmental impact. Although 96% recognise the importance of a published Theory of Change, just 22% have one in place and while three quarters value impact measurement, only 17% rate their progress as advanced.  
• In August 2025, Sport England’s freshly unveiled Diversity and Inclusion Action Plan (DIAP) for 2025–2029 firmly embeds social and governance priorities within its organisational DNA and wider sectoral leadership. The plan commits to building a workforce that authentically reflects broader society by 2029, enhancing employees’ awareness and capacity to champion inclusion, fostering a culture where inclusive behaviours are the norm and ensuring policies align with evolving equality legislation. 

Governance

• The UK Gambling Commission is updating its Licence Conditions and Codes of Practice (LCCP) to strengthen governance and consumer protections in the gambling and entertainment sector. From 31 October 2025, establishments must improve transparency over customer funds protection, including reminders to consumers about insolvency safeguards. From 19 January 2026, significant changes to social responsibility requirements come into force, including limits on bonus wagering terms and a ban on mixed‑product promotional incentives that link different types of gambling in one offer – moves designed to reduce confusing incentives that can contribute to harm.
• References to older unfair trading regulations are also being updated to reflect the new Digital Markets, Competition and Consumers Act 2024, modernising compliance obligations. These reforms aim to improve operator governance, promote clearer marketing practices and reduce potential harm to consumers, particularly vulnerable players. Industry stakeholders will need to revise internal compliance frameworks and promotional practices to align with the updated regulatory regime. The focus on transparency and responsible incentives reflects wider expectations for stronger social safeguards within regulated entertainment sectors.

For more information on any of the UK’s 600+ industries, log on to www.ibisworld.com, or follow IBISWorld on LinkedIn.