Can green industry power UK growth?

“Growth at any cost” is the new government mantra that is really worrying environment campaigners and raising questions about whether Labour remains fully committed to its net zero mission. Organisations like the RSPB, called the government’s pursual of growth at any cost ‘misguided’ and the Green Alliance called into question the economic case for bigger airports and new roads.  But is there a win-win scenario? Can we have both a growing economy and green one? 

The CBI seems to think so. This week CBI Economics released a report showing the growing contributions of net zero to the UK economy. Commissioned by the Energy & Climate Intelligence Unit (ECIU) it highlights the impact of the UK's net zero economy, saying it has become a powerhouse of job creation and economic expansion with net zero businesses growing much faster than the wider economy, growing 10% last year, and contributing £83.1bn. 

It reports that in 2024, there were 22,800 net zero businesses, with small and medium-sized enterprises (SMEs) making up 94% of the sector. These businesses support 273,000 full-time jobs and when you factor in supply chain activities, this jumps to 951,000 jobs across the UK. And the findings show that net zero jobs are 40% more productive than the national average, with wages 15% higher than average.  

The economic benefit is spread across the UK. The West Midlands, Yorkshire & the Humber, and Southwest England are emerging as green growth hotspots, contributing 16.3% of the nation's net zero economy. Scotland, Wales, and Northern Ireland are also reaping the rewards and Scotland has seen the UK’s highest growth in economic activity from net zero businesses since 2022. 

It seems that investors are taking notice too.  In 2023/24, net zero businesses attracted £23 billion in funding, with £20.1 billion coming from foreign direct investment (FDI), a growth of 47% compared to 2022/23.  

So, there is clearly serious momentum in the green economy, and it’s becoming an increasingly prominent part of the growth equation. This also adds to the evidence that growth and sustainability do not have to be mutually exclusive. Sceptics will question if this ‘green powerhouse’ is enough to offset the costs of a green transition, but the CBI would argue we simple can’t do without it as “inaction is indisputably costlier than action.”