Mapping the net zero economy

Defining the net zero economy

The low-carbon and renewable energy economy has grown rapidly to support the UK’s ambitions to achieve net zero greenhouse gas emissions. However, the traditional sectoral classifications in the UK were last updated in 2007, prior to the net zero commitment. As a result, they provide limited insight into business activity in green or low-carbon sectors. Therefore, there is less data available for businesses and local authorities to understand the opportunities for investments and the potential implications of the transition on their operations.

Net zero and its impact on the UK economy

20,000 businesses encompass the UK’s net zero economy. These businesses are in sectors such as energy and manufacturing, as well as financial services, and include both large multinationals and SMEs.

Net zero creates high-skilled employment opportunities

Businesses in the net zero economy support a total of 840,000 full-time equivalent (FTE) jobs and accounts for 3.2% of total jobs in the UK economy. This is more than the mining, energy and water supply sector. As with GVA, an additional 1.4% of jobs are supported along the supply chain, in addition to 1.1% of jobs created within the net zero economy itself.

Net zero innovation will boost investment within the UK

Given the transformations required across all sectors to become net zero, the transition is an opportunity for the UK to boost investment and for businesses to grow. The tracked net zero economy has seen considerable growth in investment in recent years. Over the 6-year period from 2016 to 2021, venture funding into the net zero economy has grown at a constant annual growth rate of over 30%.

Source: Mapping the net zero economy