Majority of UK business leaders back moves to phase out fossil fuels

A majority (55%) of UK business leaders support the government’s efforts to phase out fossil fuels from the UK’s power system, a new survey reveals. 

More than six in ten businesses say fossil fuel phase out will have a positive or no impact on UK businesses (62%), compared with just a third (33%) saying it will have a negative effect, according to the latest UK Business Leader survey of over 1,350 entrepreneurs carried out by Survation.

Likewise, 62% of business leaders say phasing out oil and gas would benefit the UK economy or make no difference to it, compared with only 35% who see it suffering as a result. 

A majority (55%) of UK business leaders support the government’s efforts to phase out fossil fuels

The findings come as the conflicts in the Middle East continue to drive volatility in oil and gas markets, with sharp spikes in UK energy bills expected as a result this winter. 

The survey found that UK business leaders view policies that cut the UK’s exposure to oil and gas as the most effective ways to reduce business energy costs. Building more renewable energy, encouraging energy efficiency, developing energy storage capacity, more nuclear energy and upgrading the grid were all favoured over new drilling. 

North Sea drilling has become a major political flashpoint in recent months, particularly as decisions approach on the Rosebank oil field and Jackdaw gas field.

Encouragingly, two-thirds of business leaders (66%) say getting off fossil fuels is in the public interest, with a similar number (64%) worried about the impact of climate change on their company, including on suppliers and customers. 

Overall, nearly three quarters (74%) of business leaders say the government is moving at the right pace or too slowly in its efforts to phase out oil and gas (44% and 30% respectively) while only around fifth (21%) say it is progressing too quickly. 

Two-thirds of business leaders (66%) say getting off fossil fuels is in the public interest

This summer’s heatwaves are estimated to have cost the UK economy £4.4bn in lost output, while the scorching heat across Europe is set to cost the EU economy €180 billion, or roughly one percent of GDP. Scientists warn that the current El Niño phenomenon, the strongest on record, will add to the disruption the world is already experiencing from climate change. 

The Labour government’s pledge to end new oil and gas licensing is also welcomed by almost half (45%) of those business leaders surveyed, compared to fewer than a third (31%) who oppose it. However, a clear majority of business leaders (62%) think ending new exploration licensing would send a clear message to businesses about the government's commitment to the energy transition.

Commenting on the survey data, James Alexander, CEO of the UK Sustainable Investment and Finance Association (UKSIF) said, “Businesses clearly recognise that breaking the UK’s long-term reliance on fossil fuels makes financial sense. We’ve seen just this year how oil and gas dependency can leave companies exposed to sudden price shocks, driving up operating costs and squeezing profit margins.

“Countries that are shifting to clean energy now will be far better placed to convince global markets they are a stable destination for investment in the years ahead. Policymakers must ensure they fully recognise the business consensus on this issue.”‍

Rachel Solomon Williams, executive director, Aldersgate Group, added, "Our business members are clear that clean power and greater electrification are a key route to investment, competitiveness and energy security in the UK.

“The closure of the Strait of Hormuz is yet another reminder of how exposed UK firms remain to volatile international fossil fuel prices. The best protection is to make clean electricity more competitive with gas, moving policy costs off electricity bills and onto general taxation, progressing grid development and connection reform, and accelerating economy-wide electrification.

“Above all, businesses need clear, stable, and long-term policy signals to commit the investment needed. With climate impacts already adding costs for businesses, delay is not a cheap option."

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The UK Business Leader Survey by Survation and commissioned by Uplift interviewed 1,374 UK business leaders between 25th August – 11th September

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