Survey: UK businesses embracing climate transition for growth

Nine in ten UK businesses plan faster climate action

UK businesses are racing ahead on climate transition. A 2025 HSBC survey shows that 90% of UK corporate leaders intend to speed up their low-carbon plans over the next three years. This marks a significant shift from viewing sustainability as a compliance task to treating it as a commercial opportunity.

The findings come from HSBC’s Sustainability Pulse Survey, which polled 1,651 senior decision-makers and 500 institutional investors across 12 global markets. UK respondents outpace their European counterparts, where 84% plan similar acceleration. The global average sits at 78%.

For UK SMEs, this trend carries practical consequences. As larger firms invest more heavily in climate transition, expectations cascade through supply chains. Procurement criteria increasingly demand carbon reporting, transition plans, and evidence of progress. Businesses without these elements may find themselves excluded from tender processes or facing pressure from clients to demonstrate their approach.

The survey also reveals that 98% of UK business leaders believe strong sustainability strategies improve financial performance and attract capital. Meanwhile, 79% of European institutional investors share this view. This alignment between corporate strategy and investor priorities creates both opportunity and pressure for smaller businesses looking to grow or secure funding.

Capital expenditure on climate set to triple

The research shows a sharp increase in planned spending. Companies allocating more than 10% of their total capital budgets to climate initiatives expect this figure to triple within three years. Furthermore, firms already spending at this level report 93% confidence in meeting their climate goals.

This spending pattern reflects a broader recognition that transition requires upfront investment. Technologies for energy efficiency, renewable power, and emissions monitoring all carry costs. However, the survey suggests businesses see these as investments rather than expenses.

Across Europe, 65% of firms already have established climate transition plans in place. This baseline provides context for the UK’s accelerated intentions. While many businesses have drafted plans, implementation and increased ambition now define the competitive landscape.

HSBC itself deployed $54.1 billion in sustainable finance during the first half of 2025, representing a 19% increase year on year. The bank has also reviewed 4,000 customer transition plans to identify high-impact sectors. This activity suggests financial institutions are actively supporting business transition efforts with capital and advisory services.

Globally, 95% of surveyed companies view sustainability as a commercial opportunity. An even higher proportion, 99%, expect competitive advantages from their climate transition work. These figures indicate a fundamental shift in how businesses perceive environmental action.

Technology adoption reaches 63% of companies

The survey identifies 63% of participating companies as advanced adopters of climate technologies. Sectors including commercial real estate, technology, media, and telecoms lead this adoption curve. These industries often face direct operational benefits from energy-efficient systems and renewable power sources.

For businesses further behind, this creates a gap to close. Technology vendors increasingly target climate solutions at the SME market, making tools more accessible. Nevertheless, implementation requires technical knowledge and capital that some smaller firms struggle to marshal.

HSBC has launched Transition Pathways initiatives for carbon-intensive sectors such as energy, industrials, and transport. These programs draw on insights from 375 industrial and chemical firms and 300 transport and logistics companies. The data covers emission reductions, investment patterns, and practical implementation challenges.

The bank’s own net zero transition plan, updated in 2025, commits to net zero by 2050 with interim targets based on decarbonization data. HSBC also engages with regulators on scalable climate technology. This dual approach of supporting customers while managing its own transition reflects broader patterns across financial services.

Regional variations emerge from the data. Asian markets including Indonesia, Singapore, and India show strong momentum on climate action. European firms demonstrate high baseline adoption of transition plans. UK businesses combine established planning with accelerated ambition, positioning themselves ahead of European averages.

Supply chain pressure and procurement requirements

As large corporations intensify their climate commitments, they increasingly scrutinize their supply chains. Procurement teams now routinely request carbon footprint data, evidence of transition planning, and alignment with client climate goals. This trend affects SMEs across most sectors.

For example, manufacturers supplying to automotive or construction firms face questions about their Scope 1 and 2 emissions. Service providers bidding for public sector contracts must address social value criteria that include environmental performance. Professional services firms supporting financial institutions encounter due diligence on their own climate policies.

These requirements are not abstract. They determine tender success, contract renewal, and access to preferred supplier lists. Consequently, businesses without clear answers face commercial disadvantage. The survey data suggests this pressure will intensify as more firms allocate substantial capital to their transitions and expect similar commitment from partners.

In addition, 79% of institutional investors in Europe view sustainability strategies as improving financial performance. This investor perspective influences funding decisions, valuation, and access to growth capital. SMEs seeking investment or loans increasingly encounter questions about climate risk and transition planning.

The financial case extends beyond investor relations. Companies report that sustainability work drives innovation, reduces operating costs through efficiency gains, and opens new markets. However, these benefits require initial investment and strategic focus. Businesses that delay face rising costs to catch up as technologies mature and competitors establish advantages.

What the research means for smaller businesses

The HSBC survey primarily covers large corporates, yet the implications reach throughout business networks. When 90% of UK corporate leaders plan faster climate action, their suppliers, service providers, and partners must respond. This dynamic creates both risk and opportunity for SMEs.

Businesses with credible transition plans and measurable progress gain competitive advantage. They qualify for tenders that exclude less-prepared competitors. They attract investment more easily. They reduce exposure to carbon pricing, energy cost volatility, and regulatory penalties. Additionally, they position themselves for growth as markets shift toward low-carbon products and services.

Conversely, businesses without these elements face mounting challenges. Supply chain audits expose gaps. Procurement processes eliminate them from consideration. Financing becomes harder to secure. Operating costs rise as efficiency improvements lag. The gap between leaders and laggards widens as capital flows toward prepared businesses.

The tripling of climate-related capital expenditure highlights the scale of resources moving into this area. While large firms command bigger budgets, proportional thinking applies to smaller businesses too. Companies allocating meaningful resources to transition report higher confidence in achieving goals. This suggests that modest but consistent investment yields results for SMEs.

Access to support matters. HSBC’s review of 4,000 transition plans and its sector-specific pathway programs demonstrate that guidance exists. For SMEs, carbon reporting compliance support can provide structured approaches to measuring emissions and developing plans. Training through resources like sustainability skills development programs builds internal capability without requiring full-time hires.

The survey also reveals that 63% of companies are advanced technology adopters. For smaller businesses, this does not mean implementing every available solution. Rather, it suggests focusing on technologies with clear payback periods and operational benefits. Energy monitoring systems, LED lighting, heat pump upgrades, and solar installations often deliver quick returns while reducing carbon footprints.

Eight essential findings from the survey

• UK business leaders show 90% intention to accelerate climate transition in the next three years, exceeding European and global averages.
• Capital expenditure above 10% of total budgets for climate initiatives is set to triple, with high spenders reporting 93% confidence in meeting goals.
• Some 98% of UK business leaders believe sustainability strategies improve financial performance and capital attraction.
• Advanced climate technology adoption has reached 63% of surveyed companies, led by real estate and technology sectors.
• European firms show 65% baseline adoption of established transition plans, providing context for UK acceleration plans.
• HSBC deployed $54.1 billion in sustainable finance in the first half of 2025, up 19% year on year.
• Institutional investors in Europe overwhelmingly view sustainability as financially beneficial, with 79% agreement.
• Global corporate respondents report 99% expectation of competitive advantages from climate transition work.

Strategic considerations for business planning

The shift documented in this research requires businesses to assess their position and plan accordingly. Waiting carries increasing cost as peer businesses advance and supply chain requirements tighten. However, rushed action without proper planning wastes resources and produces limited results.

Therefore, businesses should start with measurement. Understanding current emissions across Scope 1, 2, and relevant Scope 3 categories provides a baseline. This data informs realistic target setting and helps identify reduction opportunities. Many SMEs discover that simple changes in energy procurement or operational practices deliver significant reductions.

Next, businesses benefit from examining their sector context. What are peer companies doing? What do major clients require? Which technologies offer the best return in this specific industry? The HSBC research shows that leadership varies by sector, suggesting that appropriate approaches differ based on business type and market position.

Transition planning need not be complex for smaller businesses. A credible plan includes current emissions data, reduction targets aligned with science-based pathways, identified actions with timelines, and clear governance. This structure satisfies most procurement requirements and provides internal direction. Resources like carbon reduction program support can help businesses develop these elements systematically.

Investment decisions should prioritize actions with dual benefits. Energy efficiency improvements reduce both emissions and operating costs. Renewable power procurement can fix energy prices while cutting carbon. Supply chain engagement identifies risks while strengthening relationships. These moves deliver commercial value alongside environmental progress.

Communication matters too. Businesses with strong transition plans should articulate them clearly to clients, investors, and partners. Tender responses should reference specific actions and measurable results. Investor discussions should connect climate strategy to business resilience and growth. Marketing should highlight genuine achievements without overstatement.

The survey’s findings on investor perspectives deserve particular attention. As 79% of European institutional investors link sustainability to financial performance, businesses seeking growth capital must address climate in their investment cases. This applies to bank lending, private equity, venture capital, and public markets. Financial institutions increasingly integrate climate risk into credit decisions and portfolio management.

Further reading

The HSBC Sustainability Pulse Survey provides detailed findings and sector breakdowns on the HSBC website. The research covers regional variations, technology adoption patterns, and investment trends across multiple markets.

For UK businesses, the Department for Energy Security and Net Zero publishes guidance on transition planning, carbon reporting, and available support schemes. This includes information on grants, tax incentives, and regulatory requirements.

Businesses pursuing sustainable procurement practices can find structured approaches to integrating climate considerations into supply chain decisions. This becomes particularly relevant as procurement requirements tighten across public and private sectors.

Understanding the economic context matters. Reports from bodies like the UK Institute of Actuaries quantify climate risks, warning of potential economic impacts without adequate transition action. These analyses support the business case for investment in climate measures by highlighting the costs of inaction.