Governments with clear net-zero policies capitalize on global business investment, new report finds

• 94% of business leaders say supportive transition policies are critical factors when making investment decisions, a major survey of leading businesses reports
• 96% of business leaders believe governments should stay committed to achieving net zero emissions
• Governments upholding strong climate commitments are unlocking the full dividend of business-led decarbonization
• 92% of surveyed business leaders say the cost of inaction on climate will outweigh the cost of the transition, with 61% expecting increased costs from climate impacts this year

Countries with clear industrial policy, long-term certainty and affordable clean energy are attracting a transition dividend, identifies a major new report released today during London Climate Action Week.

The report challenges the perception that business is backing away from net-zero. Instead, it finds investments are increasingly shaped by the reliability of national policy environments, and governments are failing to capture the full dividend of business-led decarbonization investments by backsliding on commitments and policies.

The evidence becomes more conclusive each year: the overwhelming majority of businesses want clear and ambitious climate policies and national plans from their governments. That’s because they know that the global clean energy transition is now inevitable, and is a massive economic and commercial opportunity – worth USD2 trillion last year. It’s a clear reminder that strong national climate plans are vital to unleash even greater investment, driving jobs and prosperity. At the same time, faster decarbonization and more resilient economies are crucial, as climate impacts hammer supply chains harder each year, reducing supply of key commodities like food, and pushing up business costs, which is already starting to flow through to higher inflation pressures for households and governments. - Simon Emmanuel Kervin Stiell, Executive Secretary, United Nations Framework Convention on Climate Change (UNFCCC)

The Business Breakthrough Barometer 2025 report, based on insights from more than 300 business leaders in over 50 countries, finds 56% of surveyed leaders say the primary motivation for increased investment in net-zero is to secure long-term industrial competitiveness – not just as a response to regulatory obligations or to meet reporting requirements. Companies are focusing on technologies and markets that offer both

sustainability and commercial returns, and remain committed – with 91% saying they have maintained or increased investments in the net-zero transition over the past year.

The majority of executives (96%) also believe governments should stay committed to achieving net-zero emissions, yet 50% reported declining confidence in governments’ support over the past year. This is a risk to economic growth, as 92% of business leaders surveyed believe the cost of inaction on climate will outweigh the cost of the transition, and 61% expect climate-related disruptions to create costs to their business this year.

As companies assess climate costs, net-zero policies are shaping where and how they are deploying capital. Countries with enabling policy environments are attracting a transition

dividend and have been deemed ‘bright spots’: markets with long-term signals that are increasingly attractive for transition capital. The UK, China and India are the top cited bright spot countries, becoming more attractive for investment over the past year. Conversely, half of respondents cited the US as a less attractive destination for low-carbon investment than it was a year ago, with policy instability the main reason for businesses reducing investments.

Business continues to step up investment in the net-zero transition – but this leadership must be met with equally ambitious and supportive policy. By fostering the right enabling environments, governments can accelerate growth, enhance competitiveness, and drive shared success. The road ahead demands close collaboration. - Peter Bakker, President and CEO, World Business Council for Sustainable Development (WBCSD)

He added: “The Barometer is a must-read roadmap ahead of COP30 in November. Read it carefully and act decisively.”

The 2025 Barometer also highlights an increasing divide in which sectors receive

investments – mature industries like renewable energy infrastructure and electrified transport continue to grow, with 60% of business leaders assessing that the pace of transition has accelerated in the power sector.

In contrast, investment in more nascent technologies is stalling due to a lack of policy certainty and demand growth – and this has far-reaching consequences for the pace of decarbonization. For example, 62% of respondents said the clean hydrogen transition has decelerated as rising costs and uncertain offtake lead to widespread project delays, which also has a knock-on effect for low-carbon iron-making.

The Business Breakthrough Barometer was developed to help drive the shift from promises to progress by tracking the real-world conditions that enable businesses to move from ambition to implementation. Business has a critical role to play, but progress depends on whether the right systems are in place—policies, finance, and technology—that make delivery possible. The Barometer provides a clear picture of where implementation is gaining ground, where gaps persist, and where targeted interventions can unlock momentum. As we look toward COP30, we must move decisively from aspiration to execution. This is the moment to focus on credible, inclusive, and coordinated action that delivers for people, economies, and the planet. - Dan Ioschpe, UNFCCC High-Level Climate Champion for COP30

“The Barometer reinforces a clear theme in corporate climate investment: Companies invest in new technologies when they see an opportunity to create value for their stakeholders, including customers and shareholders. Durable policy takes some of the risk out of these new investments and enables them to scale, creating competitive advantage for companies that can ‘get in the door’ early to serve growing technology markets,” noted Cate Hight, Partner at Bain & Company.

To close the gap and make achieving net-zero by 2050 viable, businesses are calling for countries to stay committed to net-zero targets, whilst providing stronger policy support and financial mechanisms that foster competitiveness, especially in sectors where deployment is still nascent but essential.