The UK’s net zero economy grows by 9% by 2023, according to a new report commissioned by Energy and Climate Intelligence Unit (ECIU), with analysis provided by CBI Economics And Data City.

The total gross value added (GVA) of companies participating in the net zero economy now stands at £74 billion. This contrasts with broader economic stagnation, with GDP growth of just 0.1% in 2023. [2]. But CBI Economics warns that without more investment and political stability, the strength of future growth will be threatened as the US and EU compete to attract and develop green industries.

The analysis concluded that net zero economy jobs are highly productive, generating economic activity of £114,300, more than one and a half times the UK average of £72,550. They are also better paid, by almost £10,000: the average net zero salary is £44,600, compared with an average of £35,400 in the UK.

Scotland, Wales and the Midlands have particularly strong net zero economies, while London has the lowest proportion of the economy based on businesses from net zero sectors.

In England and Wales, seats in the most contested constituencies (under the new restrictions) are three times more likely to be net zero economic “hotspots”.

Additionally, around two in three (65%) of the top 25 net zero hotspots and half of the top 50 net zero hotspots in England and Wales were classed as important electoral battlegrounds in the run-up to the election.

Louise Hellem, CBI Chief Economist, said: “It is clear that action is needed to grow our net zero economy. In the CBI’s Spring Budget presentation, we asked the Chancellor to set out a Net Zero Investment Plan, to identify green investment gaps and implement policies to attract private funding. This is one of many ways that the Government can use to help companies increase green economic growth, but there are many other ways that can be done. “We hope this report starts a wider debate about how the UK can take advantage of these opportunities.”

Peter Chalkley, director of the ECIU, added: “Amid economic stagnation, net zero emissions economies are bucking the trend, but it is clear that the political changes of the past year have undermined investor confidence at a time when the US and EU are investing billions of dollars to compete for clean industries. Thousands of jobs depend on net zero emissions in constituencies across the country, including many important seats. The question now is whether political parties will provide the leadership, stability and investment needed to generate greater growth or whether they will abandon the global race towards net zero.”

The analysis found net zero companies had received £279 million in public funding InnovateUK and 12.3 billion private investments during 2021-2022. By 2022, £1.5 billion will be invested in the low-emission vehicle sector, more than, for example, in the biopharmaceutical sector (£1.4 billion). However, the EY clean energy attractiveness index in the UK experienced a decline last year.

The net zero economic sector includes renewable energy, energy storage, green finance and recycling.

Thomas Farquharchief commercial officer at a cleantech startup Hot, said: “The UK’s net zero economy is a vibrant and vibrant region, offering huge growth opportunities for new and innovative businesses. SMEs will be the engine of the net zero economy and represent 61% of employment in the private sector. However, for this growth to materialize, the Government must deliver coherent policies and unwavering ambition.”