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In-house funding and priorities

Reporting and disclosure require companies to look back at what’s been done (or not done) to date, but as edie’s survey shows, many are indeed focusing on long-term plans toward their net-zero and climate ambitions.

Almost one-third of the world’s highest-emitting public companies now have long-term climate targets aligned to the 1.5C target of the Paris Agreement, but many are still failing to outline credible steps of delivery.

Over the last two and a half years the Transition Plan Taskforce (TPT) has been the spearhead behind the uptake of climate transition plans to help map approaches to net-zero in the UK. The TPT was launched by the Treasury in April 2022, with a pledge that large businesses in high-emission sectors would be subjected to new net-zero disclosure requirements from 2023.

This has seen many companies publish their first Climate Transition Plans, and as a result, has seen internal sustainability teams improve engagement with the board and other areas of the business.

Climate Transition Plans require an entire rethink of how a business operates, and for those that are doing, or have completed CSRD compliance, Double Materiality may also uncover some previously unseen risks and opportunities as the transition takes shape.

While 70% of edie survey respondents have made a public commitment to net-zero by 2050 at the latest, just 46% have developed a 1.5C aligned Climate Transition Plan. Additionally, 41% of businesses have interim climate targets that expire this year and will either need to set new goals after reaching them, or realign their timeframes if they haven’t. Regardless, many sustainability professionals will be spending 2025 ironing out their targets and long-term plans.

It may not be a bad time to make progress on these big, challenging documents. Given the current economic downturn, many are struggling to gain access to funding for sustainability initiatives.

In our January-March survey from last year, an "internal mindset focused on short-term gains”, was cited by 20% of the audience, with 13% noting that they do not have the funds to implement change.

Unfortunately, it seems that mindset is prevalent and increasing, with 30% now citing short-term profitability mindsets as the biggest challenge they face. This is the highest-ranked response in the survey, followed by lack of funding and investment (20%), which is also an increase from last year. Policy regulations were cited by 15% of respondents.

Last year, almost 34% of respondents claimed that their finance departments are not engaged with sustainability or climate action, which has limited the scope and ambition of both target-setting and implementing solutions. Fortunately, the latest Business Tracker notes an uptick in financial engagement. In 2025, only 12% of businesses claimed their finance team was not engaged in sustainability. As more internal engagement and buy-in take place, there is cause for optimism that sustainability teams can articulate the value of sustainability investments and funding.

Q. What do you believe to be the biggest challenge facing your organisation's sustainability strategy right now?

▉ Short-term mindset – 30%

▉ Lack of funding/investment – 20%

▉ Policy changes – 15%

▉ Supplier engagement – 12%

▉ Reporting and disclosure - 9%

▉ Consumer engagement - 5%

▉ Staff engagement - 5%

▉ Skills gap - 3%

Budgets for sustainability and decarbonisation vary wildly, with the same amount (15%) stating their budget was less than £5,000 as those who had a budget of £1m.

In terms of the priority areas to spend and reduce emissions internally, energy efficiency upgrades remain the big focus. Almost two-thirds (60%) of respondents listed efficiency upgrades as a high or business critical priority, followed by Scope 3 and supplier emissions (56%) and energy data management systems (52%). Refreshingly, of the 70% of businesses that do have a public net-zero target, 66% have Scope 3 targets in place, with a further 14% aiming to introduce targets this year.

Despite efforts to unveil long-term plans that detail HOW a net-zero transition will be delivered, and businesses aiming to focus energy investments this year, there is little sign that sustainability teams themselves will increase in size.

Only 24% of businesses plan to expand the number of members involved in the core, in-house sustainability team this year, meaning many will need to rely on upskilling and internal engagement to embed sustainability across an organisation.