UK ESG Fast Facts

IBISWorld presents a collection of fast facts on the ESG performance of different sectors of the UK economy.

Agriculture, Forestry & Fishing 

Environmental

• In January 2026, the government announced a £21.5 million package for 15 projects to commercialise lower-emission and productivity-enhancing farm technology, including work on carbon-negative fertiliser from livestock manure. As farm productivity becomes more intertwined with sustainability objectives, this is likely to provide a boost to long-term output while helping to lower emissions.
• Defra’s 2026 Capital Grants offer, released in March 2026, opened with a specific focus on water quality, air quality and wider land resilience, while ministers also said broader Capital Grants funding will rise from £150 million to £225 million in 2026. This will keep spending on environmental improvements elevated, supporting the sector’s transition towards more sustainable and climate-resilient operations.
• In June 2026, the results of the government’s Farm Practices Survey undertaken in February 2026 were revealed. It highlighted that in 2026, 54% of farms considered greenhouse gases (GHGs) to be fairly or very important when making decisions about their land, crops and livestock. The survey also showed that around 37% of farms believe that reducing GHG emissions on the farm will contribute to overall profitability, while 47% are actively implementing measures to lower their emissions. For those taking action, the most popular methods were recycling farm waste and improving energy efficiency.
• The Beef and Lamb Environmental Roadmap was published in July 2026, setting out practical, low-cost steps livestock producers across England and Wales can take to reduce GHG emissions, but maintain productive and profitable businesses. The report provides advice that could lead to a 7.9% reduction in GHG emissions. Examples of the seven ‘no-cost’ or ‘cost-neutral’ actions include optimising lifetime growth and improving nutrition.
• Amid the prolonged period of hot weather in the UK, the National Farming Union has made repeated calls for the government to take action on the increasing threat of wildfires. It states that in 2025, the wildfire seasons saw nearly 48,000 hectares burned across the UK, seven times the annual average recorded between 2006 and 2024. It is calling for a National Wildfire Strategy for England and Wales to help mitigate the risk to livestock, crops and people’s homes. 

Social 

• According to Defra data, the total number of people working on agricultural holdings in England was 279,000 on 1 June 2025. This is a decrease of 1.9% since 2024 and continues the general downward trend seen over the last three years. Farmers, business partners, directors and spouses continue to account for over half (60%) of the total workforce and decreased by 3.1% to 168 thousand people in 2025, mostly due to a reduction in part-time farmers. Meanwhile, only 16% of principal farmers and holders were female, a figure largely unchanged over the past five years, while 40% of principal farmers and holders were aged 65 years or older and just 15% were under 45 years old.
• Sentiment towards British farming is on the up as “Buy British” narratives take hold. The 2025 AHDB/YouGov survey reveals that 71% of consumers hold a positive view of British agriculture, up from 67% in 2024 and the highest level since the survey began in 2019. 58% of consumers say they are likely to seek out British food over imported alternatives, offering a welcome boost for a sector that has struggled with rising input costs, volatile commodity prices and competition from cheaper imports.
• According to the Financial Times, while the agricultural sector has traditionally been male-dominated, more women have recently begun securing top positions. For example, Minette Batters serves as the president of the National Farmers’ Union (NFU) of England and Wales. This shift is largely driven by the sector's technological transformation and focus on sustainable practices. Supporting this trend, the Royal Agricultural University in the UK has seen an uptick in female students, with women making up 46% of the cohort in the 2022-23 academic year, up from 42% in 2019-20.
• Animal welfare is becoming a more material issue across primary production. England’s new animal welfare strategy, published in late 2025, includes plans to consult on phasing out cages in farming and to introduce standards for the humane killing of fish. For agriculture and fishing alike, this raises the prospect of higher compliance costs but also stronger welfare expectations from policymakers and consumers.

Governance

• The farming industry has been subject to widespread lobbying and protests following the government’s decision to introduce a £1 million limit on the inheritance tax (IHT) relief for farms from April 2026, after that there would be a 50% relief, at an effective rate of 20%, which has struck uproar among British farmers as many cite this will threaten the survival of their farms. As a result of the concerns raised, in December 2025, the government announced that the £1 million Agricultural and Business Property Reliefs threshold will be increased to £2.5 million from April 2026, meaning just 15% of farms are now eligible, down from the 25% previously.
• On 19 May 2025, the UK and EU established a renewed cooperation agenda at a summit, focusing on fisheries within a broader political agreement. Post-Brexit, the UK regained control over its Territorial Sea and Exclusive Economic Zone, but due to shared fish stocks, Total Allowable Catch (TAC) agreements were necessary. The UK's TAC share increased under the Trade and Cooperation Agreement (2021-2025), with EU access to UK waters set to expire in 2026. The new agreement stabilises stock division from June 2026, unless mutually altered, and grants reciprocal fishing access until 30 June 2038, as formalised by the Specialised Committee on Fisheries. This continues to drive competition and uncertainty over rule compliance by EU vessels.
• Research carried out by advocacy group Sustain and reported by The Guardian found that intensive livestock “megafarms” are continuing to progress through planning without disclosing their full emissions. This is despite a 2024 Supreme Court ruling requiring all major developments to account for significant direct and indirect greenhouse-gas outputs. Of the 35 planning applications submitted since the ruling, none provided emissions data for the farms themselves, highlighting a major gap in environmental scrutiny.
• Defra’s updated farm support framework remains in flux, with the Sustainable Farming Incentive 2026 introducing 71 actions and revised payment rates, while ministers have also signalled further changes to grant support from 2027. Defra confirmed in July 2026 that around 75% of the Window 1 budget had now been allocated, based on the applications it had received so far. The continued evolution of post-Brexit support schemes means companies are still adapting to a shifting policy backdrop, with funding visibility and compliance requirements likely to remain key considerations over the coming years.
• In June 2026, the UK government published new guidance on what farmers and growers can expect from the EU realignment that is expected to take place from mid-2027 under the Sanitary and Phytosanitary Agreement that is currently under negotiation. The guidance outlines areas in which farmers and growers will be expected to make changes, including changes to purchases and usage of Plant Protect Products and biocides, changes to checks and certificates required for importing and exporting plant products, as well as changes to how new plant breeds are registered. 

Mining

Environmental

• A recent report by Offshore Energies UK (OEUK), published in September 2025, revealed that the North Sea oil and gas industry has achieved a 35% reduction in greenhouse gas emissions between 2018 and 2024, exceeding the 25% target outlined in the North Sea Transition Deal for 2027. The report also shows a 78% reduction in overall volumes of reported unintentional oil and chemical releases between 2018 and 2024.
• The Global Mining & Metals Greenhouse Gas Emissions Dataset by the International Council on Mining and Metals, published in March 2026, found that non-coal mining accounted for just 0.54% of global GHG emissions in 2024.
• The UK government’s Vision 2035 Critical Minerals Strategy, updated in late January 2026, sets out ambitions to produce 10% of domestic demand for key minerals by 2035 and to host at least 50 active critical mineral projects, including mining. It also sets a specific target of 50,000 tonnes of lithium carbonate equivalent per year. To support this, £50 million has been allocated for extraction, refining and recycling.

Social

• The shift towards renewables and decline of the mining sector, including a ban on new licences, are having a significant impact on jobs in the UK, with trade union Unite criticising the unfavourable government policy in the North Sea. Published in June 2025, a study by Robert Gordon University titled ‘Striking the Balance: Building a Sustainable UK Offshore Energy Workforce’ states that the oil and gas workforce declined by about 5,000 jobs between 2023 and 2024, from 120,000 to 115,000 and if the current trend continues, this figure could plunge to between 57,000 and 71,000 by the early 2030s. Meanwhile, the workforce in the renewables segment will thrive and could climb from 39,000 to between 84,000 and 153,000 by 2035. To support affected workers, in June 2026, the UK and Scottish governments jointly committed £6 million to expand the Oil and Gas Transition Training Fund scheme to over 1,000 more workers across Scotland, building on an Aberdeen pilot that retrained 400 North Sea workers. Eligible workers can now access careers advice and funded training in roles like welding, electrical engineering and construction, with the programme set to broaden into advanced manufacturing, life sciences and defence, as part of a wider £20 million commitment to support energy transition.
• The mining sector is one of the highest-paid sectors, but also has the widest gender pay gap in the UK, at 26.7%, as per data by Ciphr from February 2026. By comparison, the UK-wide mean gender pay gap for full-time employees is 10.9%. The Mining Remediation Authority's own 2025 pay gap report reported a mean gender pay gap of 8.45%, a reduction of 7.89 percentage points from the prior year, with commitments to gender-balanced workforce policies embedded in its 2025–2028 Everyday Inclusion Plan.
• Health and safety are at the forefront of mining company operations. The Mining Remediation Authority's annual report for 2024 and 2025 highlighted its focus on safety and community well-being. It investigated over 1,000 mining hazards and subsidence claims to keep the public safe. However, it also reported that accidents and incidents increased from 10 in 2023-24 to 14 in 2024-25. The Authority published its Health, Safety and Wellbeing Plan 2025–2028 in October 2025, setting formal workforce protection standards for remediation staff working on hazardous mining sites. It focuses on occupational safety, mental health support and wellbeing frameworks, reflecting increased regulatory attention on mine worker safety and long-term exposure risks from polluted sites and abandoned mines.

Governance

• Under the UK Sustainability Reporting Standards (UK SRS), published in late February 2026, Scope 3 emissions reporting is now mandatory for material categories. The phased implementation schedule requires Scope 1 and 2 disclosures from 2026-27, Scope 3 from 2027-28 and all material sustainability risks from 2028-29. For mining companies, Scope 3 can represent up to 95% of total emissions for some commodities, as per the International Council on Mining and Metals.
• Some companies in the sector have been under scrutiny over taxes. According to law firm Pinsent Masons, 14 oil and gas companies have been under investigation by the HMRC in relation to underpaying the Energy Profits Levy. Recently, the Financial Times reported that the government has called for an investigation into Prax Group, the owners of the Lindsey oil refinery since 2021, which filed for insolvency in June 2025, with hundreds of jobs at risk. It reports that the collapsed oil company owes the government up to £250 million in unpaid taxes. The site, which employed around 400 people, processed 96,600 barrels of oil a day in 2024. In September 2025, oil and gas company Serica Energy agreed to acquire assets in the UK North Sea from Prax Group.
• Oil and gas drilling has been controversial for quite some time, with climate campaigners voicing their concerns. In January 2025, following a case by environmental group campaigners, including Greenpeace, a court ruled that the approval for the Rosebank and Jackdaw oil and gas fields was unlawful. The Guardian reported that a further 13 oil and gas licences could be scrapped following the court’s decision. In March 2025, as part of its ‘Building the North Sea’s Energy Future’ consultation, the government confirmed plans laid out in its election manifesto to halt new licenses on new oil and gas exploration; however, the consultation has also left the door open for new fields to be drilled via adjacent existing ones, a move which has been welcomed positively by the oil and gas industry.
• Mining group Eurasian Natural Resources Corporation (ENRC) is suing the UK’s Serious Fraud Office (SFO) for £125 million, alleging misconduct in a long-running corruption investigation, according to AML Intelligence. The case centres on claims that the SFO mishandled confidential information and relied on flawed evidence during its probe into ENRC’s operations. The legal dispute highlights ongoing scrutiny of enforcement practices and governance within the UK’s regulatory framework.

Manufacturing

Environmental

• According to the latest provisional DESNZ greenhouse gas emissions estimates released in April 2026, industry sector emissions fell a further 12% in 2025, building on the 7.4% decline recorded across manufacturing in 2024. Lower gas use and reduced activity in carbon-intensive industries, particularly steel, continue to weigh on the sector’s emissions footprint.
• In June 2025, the government introduced the Clean Energy Industries Sector Plan, aiming to boost clean energy investments to over £30 billion annually by 2035. The plan also allocates £700 million to Great British Energy to develop domestic manufacturing facilities for clean power technologies, facilitating the manufacturing sector's shift to renewable energy sources.
• As emission targets approach, companies are increasingly investing in renewable energy to reduce their carbon footprints. For example, manufacturer Kimberly-Clark is investing over £125 million in green hydrogen infrastructure to decarbonise two of its manufacturing plants. Green hydrogen will replace natural gas used in steam generation, aiming for a 50% reduction in Kimberly-Clark's natural gas consumption across UK production lines beginning in 2027. These projects are supported by funding from the UK government’s Hydrogen Production Business Model (HPBM) and Net Zero Hydrogen Fund. Meanwhile, the Department for Business and Trade has announced support for transitioning the Scunthorpe steelworks from blast-furnace operations to electric-arc furnace technology, marking a major shift in UK steelmaking. Ministers will draw on the £2.5 billion funding package committed in February to help decarbonise the UK steel sector and underpin long-term investment.
• PackUK updated the packaging EPR regime in February 2026, confirming that disposal fees will stay in place for year one while also setting out modulated disposal fees from 2026 to 2029 based on recyclability. For manufacturers, this means greater pressure to redesign packaging formats, reduce reliance on hard-to-recycle materials and strengthen compliance systems, as costs become increasingly linked to the sustainability of product design.
• Carbon pricing is becoming increasingly important for UK manufacturers. In July 2026, the government published further details of the UK's Carbon Border Adjustment Mechanism ahead of its introduction on 1 January 2027. The mechanism will apply a carbon price to imports of iron, steel, aluminium, cement, fertiliser and hydrogen, reducing the risk of UK manufacturers being undercut by higher-emission imports. Manufacturers importing covered products are likely to face additional reporting and compliance requirements, while domestic producers could benefit from a more level playing field.

Social

• The UK's Modern Industrial Strategy 2025 sets out a 10-year framework aimed at boosting business investment and creating 1.1 million jobs, particularly within advanced manufacturing. The government is committed to enhancing skills through comprehensive reforms, including shorter apprenticeships and targeted upskilling and reskilling programs.
• As reported by ONS data, women constituted only 26.1% of the manufacturing workforce in 2024. The Women in Manufacturing Initiative UK aims to uplift female participation in the sector to 35% by 2035, helping to address labour shortages and promote industry growth.
• Make UK’s March 2026 Shape of British Industry report found that 99% of manufacturers say access to skills will shape their future growth plans, while half say shortages are already their biggest barrier to growth. This keeps recruitment, training and workforce development firmly in focus across the sector.
• Recruiting skilled workers remains one of the biggest challenges facing UK manufacturers. Make UK's "AI, Skills and the Future of the UK Manufacturing Sector", published in June 2026, highlights growing demand for digital, engineering and automation skills as manufacturers invest in new technologies. A shortage of suitably qualified workers is likely to increase recruitment and training costs while making it harder for manufacturers to adopt new production technologies.

Governance

• To advance the decarbonisation of industrial production, the UK will implement the UK Carbon Border Adjustment Mechanism (CBAM) starting in January 2027. This mechanism will impose a carbon price on high-emission industrial imports – specifically from the aluminium, cement, fertiliser, hydrogen and iron and steel industries - which are vulnerable to carbon leakage. UK exporters sending CBAM-sector goods to the EU will also encounter CBAM pricing and reporting obligations from 2026. Discrepancies between UK and EU carbon pricing may lead to additional costs and administrative complexities. CBAM elevates governance complexity for manufacturers reliant on foreign inputs.
• In April 2025, the Steel Industry (Special Measures) Bill was passed, empowering the Secretary of State to safeguard the future of UK steelmaking. This includes overseeing British Steel's operations, securing raw materials and maintaining blast furnace activities. Although there are no plans to nationalise British Steel, the government is evaluating the potential financial implications for public funds. Meanwhile, on 21 August 2025, the government declared it would take control of a significant portion of Sanjeev Gupta's Liberty Steel business. This decision comes after one of the UK's largest steelworkers was declared bankrupt in London's High Court, with the move aiming to safeguard the jobs of 1,450 employees.
• The Product Regulation and Metrology Act 2025 received Royal Assent on 21 July 2025, giving the government powers to regulate the safety and performance of products on the UK market, including addressing environmental and safety impacts.
• Trade compliance requirements are intensifying ahead of the UK’s CBAM rollout in 2027, with manufacturers increasingly required to strengthen emissions reporting, supplier data collection and import compliance processes. This is likely to keep governance and reporting systems in sharp focus over the coming years.

Utilities

Environmental

• The UK is committed to achieving a net-zero electricity system by 2030, as outlined in the Clean Power 2030 Action Plan. This plan targets the generation of 43-50 GW of offshore wind, 27-29 GW of onshore wind and 45-47 GW of solar power to significantly reduce the nation’s fossil-fuel reliance. Energy companies are required to boost low-carbon production and phase out fossil fuels, prompting increased investments in cleaner generation and storage. Centrica, a leading energy company, has committed to providing all its UK and Ireland customers with renewable or zero-carbon electricity by 2030. To meet this goal, Centrica plans to invest £600 to 800 million annually by 2028 in low-carbon generation, supply security and customer solutions, aiming to enhance green investments to over 50% between 2023 and 2028.
• The government is launching energy-efficiency initiatives to help households adopt low-carbon energy-saving measures to help achieve net-zero targets. As part of the Boiler Upgrade Scheme, grants of £7,500 are available for installing heat pumps in homes across England and Wales. This initiative supports the goal of installing 600,000 heat pumps annually by 2028, contributing to the broader effort to decarbonise heating in residential and commercial buildings. In line with these targets, energy companies like Centrica are also setting ambitious goals, aiming to reach 20,000 heat pump sales per year.
• The government has established a goal for water companies to achieve zero pollution incidents and a 50% reduction in leakage by 2030, which is monitored by Ofwat. However, the latest Ofwat Water Company Performance Report 2023-24 indicates an increase in pollution incidents. Despite a sector commitment to reduce pollution by 20% during 2020-2025 and aiming for a 15% reduction from 2019 to 2022, only a 2% reduction has been achieved so far. In terms of leakage, companies have only achieved a reduction of 6% on an annual basis to date, against a target of 16% by 2025. In response, the government plans to partner with investors to allocate £104 billion in 2025 to upgrade ageing pipes and construct new sewage treatment facilities to reduce river pollution.
• Environmental performance remains under intense scrutiny across the water sector. The Environment Agency’s latest report, published in October 2025, showed performance slipping to 19 stars out of 36 – the weakest since monitoring began – amid continued concern over pollution incidents, sewage spills and deteriorating river quality.
• Utilities companies are stepping up network investment as climate resilience and decarbonisation pressures intensify. Ofgem’s RIIO-3 final determinations, published in December 2025, approved significant spending across electricity and gas networks for 2026 to 2031, as companies race to maintain system resilience while expanding capacity to meet rising demand and support the energy transition.
• As renewable electricity generation continues to grow, the UK will need more capacity to store electricity when supply exceeds demand. In June 2026, Ofgem selected 16 electricity storage projects to move forward under a new investment support scheme, representing up to 7.6 gigawatts of capacity and around 137 higawatt-hours of storage. Greater storage capacity should help make better use of renewable electricity and reduce pressure on the grid when wind and solar output falls.
• Water companies in England and Wales are entering the largest investment programme since privatisation. Under Ofwat's PR24 price review, the sector is set to invest £104 billion between 2025 and 2030, including £44 billion on new infrastructure to improve water quality, reduce sewage spills and strengthen resilience to drought. The scale of investment is likely to support demand for engineering and construction services, while increasing capital spending across the sector and placing greater emphasis on delivering environmental improvements.

Social

•  In January 2026, Ofwat launched a formal investigation into South East Water following repeated supply outages affecting homes and businesses in Kent and Sussex. The regulator is assessing whether the company breached its licence obligations on service resilience and infrastructure performance, after numerous bursts and system failures left customers without safe running water. Ofwat has warned that, if breaches are found, enforcement action, including fines of up to 10% of turnover or licence revocation – could follow.
• Energy companies are dedicated to ensuring energy affordability for low-income and vulnerable customers through government-led initiatives like the Energy Company Obligation (ECO) and the Warm Home Discount. The ECO4 programme, which runs until 31 March 2026, focuses on enhancing energy efficiency in homes, particularly for low-income and vulnerable households. This initiative aims to improve insulation and heating, reduce fuel poverty and help households save on their annual energy bills by facilitating essential home upgrades.  
• National Grid aims to support approximately 55,000 additional jobs by the end of the decade, focusing on creating green jobs to build a 'clean power army' of apprentice engineers, welders and technicians to ensure energy security by 2030. The government is advancing this effort with Regional Skills Pilots in Aberdeen, Cheshire, Lincolnshire and Pembrokeshire to enhance workforce development.
• National Grid is committed to fostering a gender-balanced, diverse and inclusive energy sector. It has set a specific target for women to hold at least 40% of middle management and leadership positions in the UK by 2030.
• Government support continues to play a key role in limiting pressure on household energy bills. The Warm Homes Plan, published in March 2026, set out measures expected to reduce electricity bills by an average of £150 from April, while the Warm Home Discount remains in place for lower-income and vulnerable households. This is likely to ease affordability pressures and reduce the risk of fuel poverty as cost pressures remain elevated.
• Energy affordability remains a key challenge for utility companies. From 1 July 2026, Ofgem increased the energy price cap to £1,663 for a typical household, reflecting higher wholesale energy costs. While higher prices allow suppliers to recover rising costs, they also increase pressure on household budgets and are likely to keep political and regulatory scrutiny of customer support, bad debt and affordability measures high.

Governance

• The UK government is planning a major overhaul of England’s water industry by creating a new regulator with stronger powers to tackle long standing failures in service quality, infrastructure and environmental performance. The move responds to a spate of supply outages, sewage pollution and customer complaints, following years of under‑investment and financial strain in major providers like Thames Water. The proposed body would replace existing regulators and be empowered to conduct surprise infrastructure “health checks” and intervene earlier where performance is poor. A performance improvement regime is also being considered to help struggling companies recover more efficiently. Critics argue the plans may not extend far enough, particularly on the enforcement of pollution fines or deeper structural reform of water company ownership.
• Marsh & McLennan’s UK Utilities Risk Report reveals that companies are increasingly worried about environmental, digital, workforce and investment pressures. Utilities rank policy and regulatory uncertainty, volatile weather patterns linked to climate change and cyber and security threats among their top concerns, alongside societal shifts in consumer behaviour and rising expectations for sustainability and service reliability. Companies also flagged investment and skills shortages, with a challenging labour market making it harder to attract and retain specialised talent.
• Regulatory scrutiny across the water sector continues to tighten. The government’s A New Vision for Water white paper, published in February 2026, built on the Water Special Measures Act by strengthening accountability, banning unfair executive bonuses and making pollution cover-ups a criminal offence. As public anger over sewage discharges and service failures continues to build, water companies are likely to face a tougher regulatory backdrop and greater pressure to improve operational performance.
• Environmental performance increasingly shapes regulatory outcomes. On 8 July 2026, Ofwat concluded its wastewater investigation into Severn Trent, finding the company had breached its wastewater obligations, but deciding not to impose a financial penalty. Instead, the regulator accepted legally binding undertakings after Severn Trent's shareholders had already invested £98 million to improve wastewater infrastructure before the investigation concluded. The decision suggests regulators are placing greater emphasis on early intervention and investment, instead of relying solely on financial penalties to improve environmental performance.
• Britain's electricity system will require substantial investment over the coming decades, but planning delays remain one of the biggest barriers to expanding the grid. In June 2026, the government introduced the Planning and Infrastructure Bill, which aims to speed up the approval of nationally significant infrastructure projects, including electricity transmission networks. Shorter planning times could allow network operators to connect new renewable generation more quickly, supporting investment while reducing delays to major infrastructure projects.

Construction

Environmental

• The UK Green Building Council (UKGBC) has launched a Net Zero Carbon Buildings Framework to standardise how buildings are designed, constructed and operated to deliver genuine net zero carbon outcomes across the built environment. The framework creates clear definitions and metrics for operational and embodied carbon, setting expectations for clients, designers, contractors and investors that align with UK climate targets and science‑based pathways.

• In December 2025, the government published its Environmental Improvement Plan 2025 (EIP), setting out a comprehensive strategy to tackle nature loss, pollution and climate pressures while outlining national targets and regulatory priorities that will affect businesses across sectors, including retail, construction, finance, agriculture and manufacturing. The plan emphasises restoring habitats, improving air and water quality, reducing waste, boosting biodiversity and strengthening resilience to climate impacts. It also signals a shift toward clearer rules, stronger enforcement and accountability mechanisms to ensure progress against legally backed environmental goals.

• For UK companies, the EIP underscores rising expectations on environmental performance: companies can prepare for tighter standards on emissions, waste management, biodiversity impacts, product sustainability and supply‑chain transparency. The plan’s focus on measurable outcomes and cross‑government collaboration suggests environmental policy will play a larger role in commercial planning, procurement and compliance.

• The construction sector significantly contributes to greenhouse gas emissions through embodied carbon in materials, operational emissions and demolition waste. The Construction Leadership Council's Construct Zero programme is developing new solutions to help the industry meet the national net-zero target by 2050. A crucial goal is to transition to zero-emission vehicles and onsite equipment, aiming to eliminate 78% of diesel-operated plant from construction sites by 2035. As a result, construction companies are rapidly adopting low-carbon solutions.  

• According to Carbon Trust, the government aims for new homes to be built from 2025 to produce 75-80% fewer carbon emissions than current standards. Through the Future Homes Standard, construction companies will use low-carbon solutions like heat pumps and enhance energy efficiency in residential buildings to achieve this goal.

• Retrofit has moved further up the agenda as the government ties decarbonisation more closely to housing policy. The Warm Homes Plan, published in March 2026, committed £15 billion of public investment to upgrade up to five million homes by 2030, including support for heat pumps, solar panels and energy-efficiency improvements. For construction firms, this keeps retrofit, energy upgrades and low-carbon building work firmly in focus.

• The construction sector is under growing pressure to reduce its environmental impact, with the built environment accounting for around 25% of UK greenhouse gas emissions, according to the UK Green Building Council. In June 2026, the government published its 10-Year Infrastructure Strategy, committing around £725 billion of infrastructure investment over the next decade while placing greater emphasis on low-carbon construction and resilient infrastructure. Contractors are likely to face increasing demand for lower-carbon materials, more energy-efficient designs and stronger environmental performance throughout the delivery of major projects.

Social

• In January 2026, the UK construction sector launched a National Women on Site Standard, a voluntary framework designed to improve gender inclusion, fairness and safety for women working on building sites. The standard sets clear expectations for employers on matters like site facilities, anti‑harassment policies, inclusive culture, recruitment practices and career progression support –areas where women have historically faced barriers and under‑representation. By raising workforce and site standards, the framework seeks to strengthen social outcomes like diversity, retention and equitable opportunity.

• The construction sector continues to face acute labour shortages, with ONS data showing around 28,000 vacancies in the three months to January 2026, keeping pressure on project delivery, wages and training capacity.  More than half of these vacancies go unfilled due to a skills gap, threatening the government's goal of delivering 1.5 million homes during this parliament. To address this, the government plans to train up to 60,000 more engineers, bricklayers, electricians and carpenters, supported by £100 million for 10 new Technical Excellence Colleges and £165 million to expand construction courses in existing colleges.  

• According to the Construction Industry Training Board's (CITB) Labour Market Intelligence Report for the 2025-2029 period, the construction sector will require an additional 47,860 workers annually. Over the five years, this equates to a total of 239,300 new workers needed. To support this demand, the CITB has announced a £39 million investment in the National Construction College at Erith and other sites. This investment will significantly enhance the industry's value by expanding the training offerings available.

• Housing quality and tenant safety remain high-profile social issues. The government’s Grenfell progress update said Phase One of Awaab’s Law began on 27 October 2025, requiring landlords to fix serious damp, mould and other urgent hazards within set timeframes, with the regime expanding over 2026 and 2027.

• Building safety continues to reshape the construction sector following the introduction of the Building Safety Act. In July 2026, the Industry Safety Steering Group published its fifth report, concluding that progress had been made but that significant cultural change was still needed across the industry. Contractors are likely to face greater scrutiny over competence, quality assurance and project management, increasing compliance costs while raising standards across the sector.

Governance

• The UK’s Financial Conduct Authority (FCA) has launched a formal consultation on proposals to make environmental, social and governance (ESG) ratings more transparent, reliable and comparable, marking a significant governance shift in how sustainability performance is assessed and used in markets. ESG ratings influence investment decisions, capital allocation and risk management, but users have expressed concerns about inconsistent methodologies, conflicts of interest and limited transparency in how scores are derived.

• The FCA’s proposals would apply existing regulatory standards to ratings providers and introduce tailored rules on governance, systems and controls, conflicts of interest, stakeholder engagement and disclosures, aiming to build market trust and comparability.  The consultation, open until 31 March 2026, follows government legislation bringing ESG ratings within the FCA’s remit, with final rules expected by late 2026 and the regime to take effect by June 2028.

• In April 2025, the National Infrastructure and Service Transformation Authority (NISTA) was established to streamline major infrastructure projects and implement a 10-year UK Infrastructure Strategy, with at least £735 billion in funding. NISTA offers clearer governance, improves accountability and ensures predictable planning. It also reforms project commissioning and procurement to align contracts with public strategy and goals.

• The Grenfell tragedy continues to reshape the regulatory backdrop for the construction sector. The Building Safety Act 2022 introduced a far stricter regime for higher-risk buildings, while the Building Safety Regulator became a standalone body in January 2026 as the government moves towards a single construction regulator. Together with tighter oversight of construction products and new-build quality standards, this is likely to add to compliance costs and weigh on project delivery as companies adapt to a tougher regulatory backdrop.

• Planning delays are one of the biggest constraints on construction. The government's reforms, confirmed in July 2026, remove mandatory pre-application consultation for nationally significant infrastructure projects, with the aim of cutting up to 12 months from the planning process and saving developers around £1 billion over this Parliament. Faster planning is likely to improve project pipelines for contractors and infrastructure developers.

Retail & Wholesale Trade

Environmental

• The rapid growth of resale platforms signals a structural shift in UK retail, with Vinted reporting 38% year-on-year growth as demand for second-hand goods rises. Driven by cost-of-living pressures and sustainability concerns, consumers are increasingly turning to recommerce for affordability and lower environmental impact. For retailers, this trend challenges traditional sales models while creating opportunities to develop their own resale platforms, take-back schemes and circular partnerships. From an ESG perspective, the rise of resale supports waste reduction and emissions goals and improves access to affordable goods. It reflects a broader move towards circularity, with policy and industry focus growing around textile waste and extended producer responsibility.
• Retailers are grappling with the cost impact of new packaging rules, widely debated in early 2026, following the rollout of the UK’s Extended Producer Responsibility scheme in October 2025. The policy shifts waste management costs from councils to producers, requiring retailers to report packaging data and pay fees based on recyclability. Industry estimates suggest multi-billion-pound annual costs, prompting warnings of price increases and margin pressure. Retailers are responding with packaging redesign and supplier changes. The trend embeds sustainability into core cost structures and governance systems.
• Debated heavily in 2026, retailers face growing pressure to tackle Scope 3 emissions, particularly in supply chains. This aligns with expected tightening of reporting standards from 2026-27, including ISSB-aligned disclosures and UK transition plan requirements. Many retailers lack full emissions visibility, creating compliance and reputational risk. Industry responses include supplier engagement, carbon-tracking tools and sustainable sourcing initiatives.
• Retailers are under growing pressure to address their impact on nature and biodiversity, as new data shows most lack clear targets or strategies. A 2025 report from the British Retail Consortium revealed that over 75% of retailers have no public biodiversity goals and two-thirds lack a structured, data-led plan to manage nature-related risks across supply chains.  
• With global biodiversity loss accelerating, inaction poses material risks, from supply chain disruption to long-term resource scarcity. Retailers depend on healthy ecosystems for raw materials, food production and water security, yet many are still in early stages of integrating nature into ESG strategies. Industry leaders are calling for stronger governance frameworks and nature disclosures. Meanwhile, government policy like the updated Environmental Improvement Plan is expected to raise expectations. Biodiversity is becoming a critical ESG factor, closely tied to operational resilience, investor confidence and regulatory alignment.
• In June 2026, Defra published an official update on the UK approach to tackling deforestation in global supply chains, confirming that the EU Deforestation Regulations will apply in Northern Ireland as well as outlining the proposed approach and next steps for deforestation regulations in Great Britain. For retail businesses in Northern Ireland that meet the criteria, compliance will be required as early as 30 December 2026. For those in Great Britain, legislation is intended to be delivered in 2027.
• A new December 2025 BRC net zero stocktake shows UK retailers are making progress on climate commitments, but action remains uneven across the sector. Many major chains have set net zero targets and are reducing emissions from energy use, transport and buildings, yet fewer are addressing Scope 3 emissions, those embedded in supply chains and products. Retailers report barriers including data gaps, supplier engagement challenges and investment constraints in lowering embodied emissions. The report also highlights notable efforts: energy efficiency upgrades, decarbonised logistics, renewable power procurement and waste reduction initiatives demonstrate how environmental strategies can cut costs while shrinking carbon footprints. However, smaller and mid‑sized firms lag, often lacking resources or tools to fully measure and manage their climate impacts.
• Defra’s forthcoming Circular Economy Growth Plan is expected to feature forthcoming environmental policy changes for retailers, as reported by the British Retail Consortium. This includes Extended Producer Responsibility for Textiles, mandatory food waste reporting, a waste electronic and electrical equipment takeback scheme, eco-design requirements, digital product passports and circular business models. 

Social

• Proposed UK reforms to introduce guaranteed working hours are raising concerns across the retail sector, with warnings that thousands of jobs could be at risk. The policy aims to improve job security for workers on variable or zero-hours contracts, but retailers argue it may reduce flexibility, a key feature of employment in the sector. Retail relies heavily on part-time, seasonal and shift-based roles to manage fluctuating demand. Mandatory guaranteed hours could increase labour costs and administrative complexity, leading some businesses to cut hiring, reduce hours or accelerate automation. This may disproportionately affect students, carers and entry-level workers who depend on flexible roles. The debate reflects a broader ESG challenge: how to safeguard fair working conditions while preserving inclusive job access and supporting local economies through sustainable employment models.
• Figures from the ONS reveal that over the first quarter of 2026, there were 2.79 million jobs in retail, 66,000 fewer than a year prior and the lowest four-quarter average on record. This comes amid challenges from retailers regarding added taxes and red tape that they argue are pushing up the cost of entry-level jobs. 

Governance

• The UK is stepping up restrictions on advertising of unhealthy food and drink, with the Advertising Standards Authority increasing scrutiny of how retailers promote high-fat, sugar and salt products. New rules came into effect in January 2026 and are leading to ad bans and stricter enforcement, particularly where promotions are seen to target or appeal to children or mislead consumers on health credentials. This marks a significant shift in how food is marketed, requiring clearer product positioning, reformulation efforts and more responsible advertising strategies. Promotions, packaging and digital campaigns must now align with tighter health standards, limiting the use of certain messaging, imagery and placement.
• In April 2026, regulators intensified warnings that retailers can be held liable for misleading environmental claims, even when originating from suppliers. This builds on ongoing enforcement since 2024 under the CMA Green Claims Code and consumer law reforms. Retailers must now verify sustainability claims across supply chains, increasing due diligence requirements. Failure risks fines and reputational damage. Industry responses include tighter supplier contracts, certification checks and improved data tracking.
• The British Retail Consortium (BRC) has criticised the UK Government’s recent business rates reforms as insufficient to address long‑standing structural issues in the taxation system for retail and high‑street businesses. Retailers have pointed out that business rates remain disproportionately burdensome, hitting high street shops heavily and undermining investment, expansion and cost competitiveness, particularly for larger stores that already shoulder a significant share of total rates. Industry groups warn that without deeper reform, persistent high costs will constrain growth and erode profitability, with knock‑on effects on jobs and local economies. Broader industry and government discussions continue around potential further relief measures and targeted support as part of ongoing fiscal policy debates.  
• UK and global retailers are entering a new era of ESG regulatory expectations and greenwashing risk – a major driver behind this shift is Provision 29 of the UK Corporate Governance Code, which took effect in 2025. Stakeholders are increasingly sceptical of vague environmental claims and superficial sustainability messaging. New rules and enforcement mechanisms require that sustainability claims be substantiated with credible evidence, while regulators and watchdogs are primed to act against misleading advertising and product labelling. Failure to meet these expectations can result in enforcement action, reputational damage or fines under strengthened consumer protection laws.  
• Rising consumer awareness and investor demand for genuine environmental performance are driving retailers to move beyond marketing and embed robust environmental governance, transparent reporting and product lifecycle accountability into core business practices. Examples include aligning marketing claims with verifiable carbon reduction data, auditing supply chains for sustainability performance and training marketing and compliance teams to avoid misleading language.
• The UK government has announced that it is bringing forward tax reforms to low-value imports by six months to October 2028. The government hopes that by scrapping the duty relief on cheap imports and introducing new controls, it will support fairer competition between high street and online retailers. The British Retail Consortium responded to the decision by stating that while it was correct for the government to recognise that its original timeline was too long, the six-month adjustment is not far enough and that changes should be made sooner. 

Transportation & Warehousing

Environmental

• According to the Department for Energy Security & Net Zero, surface transport is the UK's largest source of greenhouse gas emissions, accounting for 25% of the total. Cars contribute 59% of this, HGVs 19% and vans 18%, with smaller amounts from buses, motorcycles and rail. For the 7th Carbon Budget (2038-2042), the Climate Change Committee (CCC) projects that surface transport emissions must drop by 86% from 2023 levels by 2040. On 6 January 2026, the government opened a consultation on a new HGV CO2 emissions regulatory framework for the UK, considering regulatory options to reduce emissions from HGVs, support phasing out the sale of new non-zero emission HGVs weighing up to and including 26 tonnes by 2035 and phase out the sale of all new non-zero emission HGVs by 2040.
• The shift towards lower-emission freight is gathering pace. In March 2026, the government announced a £1 billion support package, including Zero Emission Truck and Van grants and funding for depot charging infrastructure, helping companies offset the upfront cost of fleet upgrades. This should support fleet renewal across the sector while reducing longer-term exposure to diesel costs and emissions pressures.
• According to the Department for Energy Security & Net Zero, domestic maritime transport entered the UK Emissions Trading Scheme on 1 July 2026, covering ships of 5,000 gross tonnes and above operating on UK domestic voyages. Shipping companies must monitor and report greenhouse gas emissions from July 2026, before beginning to surrender allowances from April 2028. The expansion gradually brings carbon pricing into another part of the transport sector, increasing compliance costs while encouraging operators to improve fuel efficiency and invest in lower-emission vessels.
• On 16 June 2026, the government announced £219 million of funding to support sustainable aviation fuel (SAF) production, including £93 million immediately available for commercial-scale projects. The investment forms part of the government's wider ambition to grow domestic SAF production and reduce aviation emissions. While greater UK production could reduce reliance on imported fuel over time, SAF remains more expensive than conventional jet fuel, leaving airlines exposed to higher fuel costs as SAF blending requirements increase.

Social

• The 2025 Women in Transport Equity Index reveals that women represent 27% of the sector's workforce. The Diversity, Equity and Inclusion (DEI) score has dropped to 47% from 50% in 2023. Moreover, 59% of transport organisations report a gender pay gap of 11% or more, with 65% of UK organisations lacking plans to address this issue, up from 44% in 2023. Women in Transport is urging the Government, industry leaders and regulators to take urgent action, including mandating gender and ethnicity pay gap audits.
• The UK’s Rail Minister has warned of growing driver shortages across train operators, urging companies to step up recruitment to avoid disruption. Of the 27,000 licensed train drivers in Britain (excluding Northern Ireland), the ASLEF union estimates that around 22% of passenger drivers are due to retire within the next five years, raising the risk of widespread service shortages and increased pressure on operators to train new staff.
• The warehouse sector is prioritising health and safety to ensure workplace well-being. In April 2025, the UK Warehousing Association (UKWA) partnered with Mentor Training to host an event focused on best practices in workplace safety. To further elevate standards, the UKWA has introduced a Certificate of Professional Competence for Warehouse Managers, featuring a dedicated module on workplace safety.
• The shift towards lower-emission transport is changing the skills needed across the industry. According to the Institute of the Motor Industry, around 35% of UK vehicle technicians are now qualified to work on electric vehicles, but the industry could still face a shortage of more than 43,000 EV-qualified technicians by 2035 if training fails to keep pace with demand. As operators continue replacing diesel fleets with electric alternatives, recruiting and retaining qualified technicians is likely to become increasingly important, placing upward pressure on labour and training costs.

Governance

• On 7 January 2026, the Department for Transport opened a consultation on whether to make local transport authorities responsible for taxi and private hire vehicles (PHVs), in an attempt to address concerns about inconsistent regulations across different regions.
• In 2025, the government's Sustainable Aviation Fuel Mandate sets a goal for sustainable aviation fuel (SAF) to comprise 2% of total fossil jet fuel, approximately 230,000 tonnes. This target will climb to 10% by 2030 and 22% by 2040. To support this initiative, the government has announced an additional £400,000 in funding to help producers bring new clean fuels to market more quickly. On 22 July 2025, the Aviation Minister announced that £63 million would be distributed among 17 UK companies to boost the production of sustainable aviation fuel. This initiative aims to support 1,400 jobs and strengthen the UK's position as a global leader in the green aviation sector.
• The Passenger Railway Services (Public Ownership) Act 2024 enables the nationalisation of passenger rail services, leading to South Western Railway coming under public control in May 2025. Its operations now fall under Great British Rail, transitioning governance from private to public sector and altering ESG reporting frameworks.
• The policy backdrop across transport and warehousing remains uncertain. Following the government’s integrated transport strategy published in April 2026, Logistics UK has called for the long-awaited freight plan to be brought forward, with clearer delivery milestones now under greater focus. Until more detail is provided, uncertainty around infrastructure planning and longer-term investment is likely to remain elevated across the sector.
• Carbon regulation continues to expand across the transport sector. The inclusion of domestic shipping within the UK Emissions Trading Scheme from 1 July 2026 extends mandatory emissions reporting and carbon pricing to a new transport mode, increasing compliance requirements while encouraging investment in cleaner vessels and fuels.

Accommodation & Food Services

Environmental

• The hospitality sector is showing increased commitment to sustainability initiatives, making practices more eco-friendly. The sector’s trade body, UKHospitality, outlines the commitment to be net zero by 2040, including eliminating unnecessary single-use packaging by 2025 and reducing food waste by 50% by 2030. The trade body points to WARP’s Guardians of Grub campaign, which states that wasted food is costing the sector £3.2 billion a year, while 75% of the wasted food could have been eaten. Some are using advanced technology to achieve greater efficiency. For instance, Marriott Hotels has rolled out Winnow AI across UK, Ireland and Nordics hotels, achieving a food waste reduction of 25% in the first half of 2024, with a target of reaching 50% reduction in 2025. However, UKHospitality notes that Scope 3 progress specifically is being slowed by intense cost pressures, staff shortages and high staff turnover.
• According to Biffa’s report on the UK Hospitality sector and sustainability in 2024, published in December 2024, 91% of businesses have a sustainability strategy in place or in planning. It also highlights that 66% of hospitality SMEs measure food waste, compared to only 41% of corporate-sized hospitality businesses. Further, 90% of businesses say they’re focused on the circular economy.
• As part of the government’s Plan for Change, the Department for Energy Security and Net Zero is trialling an initiative to provide over 600 SMEs in the hospitality sector with free energy and carbon reduction assessments, saving the hospitality sector £3 million on bills.

Social

• Hospitality businesses are some of the worst affected by recent tax and wage changes, potentially resulting in severe job cuts. As announced in the Autumn Budget 2025, the National Living Wage climbed by 4.1% in April 2026 to £12.71 for those aged 21 and over, while the wage rate for 18- to 20-year-olds climbed by 8.5% from £10 to £10.85. A 2026 survey of more than 20,000 venues for UKHospitality and other trade bodies found that 64% of UK hospitality businesses expect to cut jobs and about one in seven anticipate having to close as April’s higher wage floor and business rates take effect. Similarly, data from the British Beer and Pub Association reveals that British pubs are closing at a rate of nearly two per day in 2026, with 161 shutting across England, Scotland and Wales in Q1 alone, wiping out about 2,400 jobs.
• On 30 April 2026, Whitbread announced a five-year strategic overhaul involving the closure of its remaining 197 branded restaurants, resulting in about 3,800 job cuts.
• A report by Zonal, in partnership with CGA by NIQ and UKHospitality, has found that 68% of British consumers say hospitality plays an important role in their communities, while 74% agree the industry needs and deserves greater support from the government.
• The government unveiled the Growth and Skills Levy in April 2026, replacing the Apprenticeship Levy. This new mechanism makes the system more flexible by introducing short-course "apprenticeship units" and foundation apprenticeships, including in catering and hospitality, without requiring a commitment to full, multi-year apprenticeship programmes. It also includes full government funding for apprentices aged 16-24 in SMEs and additional grants for hiring young people who’ve been longterm unemployed. This can help hospitality businesses with persistent staff-related pressures.
• Hotels across the UK are adapting to stricter accessibility requirements as new and updated regulations come into force, according to Hotel Management Network. The changes, linked to evolving UK and EU legislation, are prompting companies to invest in upgrades like step-free access, accessible rooms and improved digital booking systems to meet compliance standards and enhance inclusivity. While these improvements can broaden customer reach and enhance the guest experience, they also entail high upfront costs.

Governance

• The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024. Under the legislation, food and drink establishments are required to pass 100% of service charges to staff. Phase Two of the UK's tipping reforms takes effect on 1 October 2026 under the Employment Rights Act 2025, adding mandatory worker consultation before any tipping policy is created or amended. Policies must also be reviewed on a three-year cycle with fresh consultation each time. Non-compliant employers face employment tribunal complaints and compensation orders of up to £5,000 per worker for financial losses.
• In the Autumn Budget 2025, the government announced the introduction of two permanently lower business rates multipliers for eligible hospitality properties with rateable values below £500,000 from April 2026, with these rates 5p lower than the national multipliers. However, UKHospitality claims that even with the reduced multiplier, business rates for small hospitality venues will climb by £318 million over three years (2026/27 to 2028/29), with a 76% rise for the average pub and 115% for the average hotel over the period. The British Beer and Pub Association has called on the government to introduce a 30% pub-specific business rates relief in a bid to prevent a severe wave of closures and up to 15,000 job cuts. In response, on 27 January 2026, the government announced a 15% cut to new business rates bills for pubs from April (worth £1,650 for the average pub in 2026-27), followed by a two-year real-terms freeze and a review into the business rates valuation method. UKHospitality has continued to lobby for a permanent reduction in VAT for the wider hospitality sector, with businesses still facing severe cost pressures.
• The UK competition watchdog, the Competition and Markets Authority (CMA), has opened a probe into Hilton, IHG, Marriott and data provider CoStar over alleged sharing of commercially sensitive information through hotel analytics platform STR (which collects data from about 90,000 hotels globally), to guide pricing and other commercial decisions. Regulators are examining whether the use of this shared data may have weakened competition by making it easier for rival hotel groups to anticipate each other’s moves and align their behaviour, potentially undermining price rivalry. If the CMA issues a formal statement of objections, potential fines could reach up to 10% of global turnover.

Information

Environmental

• Given the amount of energy requirements, the telecoms sector is increasing its efforts to reduce waste and consumption. Larger operators have set various sustainability targets, like Vodafone’s aim to cut carbon emissions from UK operations to net zero by 2027, investing millions in the process. It reported the use of 100% renewable electricity, alongside ongoing fleet electrification. Similarly, telecom giant BT unveiled its Climate Transition Plan 2025 at the end of March 2025, aiming to reach net zero across its full value chain by March 2041.
• The Department for Science, Innovation and Technology has sharply revised its projections for AI data centre emissions, now estimating they will account for between 0.9% and 3.4% of the UK's total carbon emissions over the decade to 2035, up from a previous estimate of under 0.05%. This revision signals that AI infrastructure emissions are far more material to the UK's climate trajectory than previously understood, intensifying pressure on data centre operators and cloud providers. The Guardian reported in May 2026 that data centres consume 5.9% of total UK electricity supply, well above the 2% global average, with AI-driven demand up 15% globally over two years, prompting warnings of their energy footprint.
• Under the Department for Environment, Food and Rural Affairs, the UK government released a report in January 2025 on the progress of its Greening Government ICT commitments, as outlined in the Greening Government Commitments 2021 to 2025 framework. It states that emissions from government IT dropped by 9% in 2023 and 2024 compared to 2022 and 2023 levels, while e-waste in 2023 and 2024 dipped by 17% from 2022 and 2023. In July 2025, the Government Digital Sustainability Alliance introduced a new recommendations paper for government on the circular economy, advocating reuse, refurbishment and recycling of devices, with hardware disposal becoming a bigger footprint source.
• A February 2026 IT sustainability review highlights that 67% of UK firms now require green credentials from IT partners, and 18% demand recognised certifications such as ISO 14001 or Science Based Targets, pushing data centre and software vendors to evidence energy efficiency and decarbonisation roadmaps. Meanwhile, TechUK’s 2026 climate workplan anticipates “mandatory climate transition planning and wider sustainability reporting regulations” as major issues for tech and digital firms.

Social

• Skills gap in technology is a major topic, particularly given the significant pace of technological innovation. Cyber security skills in the UK labour market 2024 research, published in September 2024 by the Department for Science, Innovation and Technology, states that approximately 390,000 businesses (27%) have gaps in advanced skills – skills that aren’t outsourced and are considered important. It also estimates that 30% of cyber firms in 2024 have faced a problem with a technical skills gap, which is a worrying number given the growing prevalence of cyber attacks. Nonetheless, this figure is lower than the estimated 49% in 2023. It is also worth noting that the skills gap for cryptography and communication security has increased from 12% in 2023 to 24% in 2024. The National Audit Office also highlights that one in three cyber security roles in government were vacant or filled by temporary staff in 2023-24. Similarly, Manchester Digital’s 2025 Sector Insights Report on the Greater Manchester’s tech sector highlights that 80% of respondents say AI skills are now essential. This is likely to be the picture for the tech sector across the rest of the country.
• At the techUK Future Telecoms Conference 2026, the Minister for the Digital Economy, Liz Lloyd, confirmed £1.8 billion in public funding under Project Gigabit to reach hard‑to‑serve areas and reiterated the goal for 99% of UK premises to have access to gigabit‑capable broadband by 2032, up from around 86% currently. Additionally, in a bid to boost nationwide fibre rollout and access for consumers, UK ministers have laid out proposals to prevent freeholders from blocking full‑fibre cabling in blocks of flats, giving flat owners a clearer right to request gigabit-capable connections.
• Ofcom fined Virgin Media O2 £28 million in 2026 after finding the telecoms group had repeatedly blocked or hindered hundreds of thousands of customers from cancelling contracts over several years, breaching consumer protection rules. The regulator has ordered a full overhaul of cancellation processes and mandated proactive compensation for customers wrongly charged exit fees, underscoring the sector's exposure to customer treatment and consumer rights failures.
• Ofcom's report, published 21 May 2026, found that TikTok and YouTube's content algorithms remain insufficiently safe for children, with 84% of eight-to-12-year-olds still accessing platforms with a minimum age of 13. This has intensified regulatory pressure under the Online Safety Act, with Ofcom warning of formal enforcement action. On 15 June 2026, the government confirmed that social media platforms will be blocked from offering services to under-16s, with regulations expected to take effect from spring 2027.

Governance

• The Data (Use and Access) Act 2025 (DUAA), which is planned to be phased in between June 2025 and June 2026, changes data protection laws in order to promote innovation and economic growth and make things easier for organisations, while still protecting people and their rights. DUAA amends, but doesn’t replace, the UK General Data Protection Regulation, the Data Protection Act 2018 and the Privacy and Electronic Communications Regulations. As such, companies in the sector must strengthen internal governance to ensure transparency, accountability and trust in data handling practices.
• Platforms are facing more stringent safety obligations. In February 2026, the UK government announced an amendment to the Crime and Policing Bill that will require regulated online services to remove non‑consensual intimate images within 48 hours of notification. Failure could mean fines of up to 10% of worldwide turnover and potential service blocking, as laid out in the Online Safety Act 2023. The UK is also extending the Online Safety Act to cover a loophole in relation to AI chatbots, in response to the recent deepfake scandal involving the Grok chatbot on the social media platform X. Ofcom's Online Safety Act enforcement regime carries substantial penalty exposure for non-compliance, with maximum fines of £18 million or 10% of global revenue and potential criminal liability for senior officers at non-compliant firms.
• A Financial Times survey of senior UK technology and data executives found that many large companies don’t understand how their sensitive data is handled when processed by overseas AI systems and cloud providers, leaving them exposed to hidden security and reputational risks.
• Barclays' Q1 2026 Business Prosperity Index found that 68% of UK firms plan to raise cybersecurity spending over the next year and 61% already use agentic AI, with cloud, cyber and AI together accounting for 44% of planned technology budgets. However, 46% of firms believe new technology adoption is increasing their cybersecurity risk exposure, highlighting a widening gap between innovation investment and robust risk-management governance frameworks.

Finance & Insurance

Environmental

• In December 2025, the Prudential Regulation Authority (PRA) published an updated Supervisory Statement (SS5/25) and accompanying policy guidance setting clearer expectations for how banks and insurers must identify, manage and govern climate‑related financial risks across their businesses. Companies are now expected to embed climate risks into core governance, risk‑management frameworks, board oversight and strategic planning, ensuring these risks are handled with the same rigour as traditional financial risks. Boards must review material climate exposures, use robust data and climate scenario analysis and document how decisions reflect risk appetite. Companies are urged to take a proportionate approach reflective of their exposure and business model, with responsibilities clearly assigned to senior management. Companies have also been required to complete a PRA mandated internal review and gap analysis against SS5/25, due June 2026, with a board approved remediation plan, marking a shift to concrete implementation of climate risk governance.
• Governance of environmental risk weakens at the Bank of England. In June 2025, in a candid reflection on environmental governance, several senior staff at the Bank of England stepped down from climate and nature-risk roles after observing a significant downgrade in the institution’s prioritisation of environmental threats. These resignations underscore a growing tension between the escalating urgency of ecological emergencies and the perceived retreat in supervisory focus within one of the UK’s most influential financial institutions. The departures signal a worrying trend – as central bankers shift away from environmental stewardship, financial stability may be undermined by blind spots in the oversight of climate-related and biodiversity risks. This erosion of environmental governance could hamper efforts to mitigate the systemic threats posed by the climate crisis and raise questions about the resilience of regulatory frameworks across the UK’s finance and insurance sectors.
• A wave of high‑profile departures from the UN‑backed Net‑Zero Banking Alliance (NZBA) has been set in motion, with UK giants HSBC and Barclays followed by Switzerland’s UBS. These banks cite the diminishing effectiveness of the alliance – after many global peers have quit – as rendering the group "no longer fit for purpose". Yet all reaffirm their individual commitment to reaching net‑zero by 2050, emphasising they now possess in‑house capabilities to meet climate goals independently. Following the departures, the NZBA’s remaining members voted in October 2025 to cease operations as a member-based organisation and to transition to a guidance-only framework. 

Social

• In April 2026, financial inclusion remains a major issue as vulnerable groups struggle to access affordable credit, banking and savings products. This builds on the UK’s Financial Inclusion Strategy (launched in November 2025, with an ongoing rollout). Rising living costs are increasing reliance on high-cost borrowing, prompting calls for expanded support and fairer products. Financial institutions are working with the government and charities to improve access, but gaps persist.
• UK financial and insurance companies have made modest progress in narrowing the gender pay gap, but the sector still lags wider economic norms and faces structural challenges. Data from the House of Commons Library, published in November 2025, reveals that the financial and insurance industry has the largest gender pay gap for full-time employees in the UK compared with other industries, at 22.3%.
• Women are significantly underrepresented in the highest pay quartiles, contributing to persistent gaps in both pay and bonus outcomes. Mandatory gender pay gap reporting has been a key governance tool, encouraging transparency and targeted action. Some organisations have employed data-driven strategies to track and address pay imbalances and sector initiatives like the Women in Finance Charter support recruitment and retention goals.
• In November 2025, the UK government launched a Financial Inclusion Strategy aimed at tackling barriers that prevent people from fully participating in the financial system, from access to banking and savings to credit, insurance and money management. The plan seeks to help underserved groups, including people experiencing homelessness, survivors of domestic abuse and families without savings, gain access to basic financial services and build resilience against economic shocks. A key element is a pilot enabling people without standard ID to open bank accounts, backed by major banks working with charities. It also includes measures to expand affordable credit and support household savings schemes. The strategy promotes financial education in schools and stronger support for those in problem debt, reflecting concern that financial exclusion contributes to inequality and economic instability. Government and financial industry bodies are partnering to remove structural barriers and expand digital and physical access points for essential services. The initiative has drawn scrutiny from MPs and campaigners who stress it must translate into real change, not just policy rhetoric.  
• Pay parity in UK finance is not expected until 2038. Women across UK financial and insurance services earn significantly less than men – on average, just 78 pence for every pound paid to men, Bloomberg and Government data reports in 2025. Despite marginal gains year‑on‑year, progress remains painfully slow, with pay parity not expected until around 2038. While investment banking shows the largest reported pay gaps, insurance firms are also grappling with long-standing disparities in pay and representation. Despite continued participation in initiatives like the Women in Finance Charter, some firms failed to meet their internal diversity targets in 2024. Around 20 financial services companies, including insurers, cited hiring freezes and organisational restructuring as key reasons. These figures underscore systemic inequalities: women are under‑represented in senior roles – across the FTSE 100, women make up 23% of chief financial officers, chief operating officers, divisional bosses or are already chief executives. This under‑representation compounds pay disparities, reflecting both persistent occupational segregation and barriers to advancement. Persistent inequalities can erode morale and tarnish the reputation of institutions, making it harder to attract and retain female talent. With voluntary efforts faltering, regulators and stakeholders may demand stronger accountability through mandatory reporting, targets and links between executive pay and diversity performance.  
• In March 2025, the UK’s Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) abandoned plans to introduce mandatory diversity and inclusion (DEI) rules for financial firms. This U-turn comes after industry objections citing regulatory burdens and costs. Critics warn that stepping back from enforceable DEI standards risks undermining progress toward inclusion and may embolden firms to deprioritise representation efforts. The move mirrors a trend seen in the United States, where DEI initiatives have faced political backlash. Without compulsory DEI reporting or targets, underrepresentation of women and minorities may persist – or even worsen. Firms now have less external pressure to act on equity, reducing accountability. Despite this shift, regulators emphasise they still intend to address non‑financial misconduct, including harassment and bullying, by mid‑2025 – signalling continued focus on culture, if not on formal DEI mandates.  
• UK financial services staff suffer above-average health decline. 2024 research by Unum UK underscores a pressing issue: UK financial services employees face significantly more health-related challenges than their counterparts across other industries. Around 38% reported worsening physical health last year, compared to just 24% across the UK economy and 37% took time off for general health issues, surpassing the national average of 29%. In response, over half of these firms plan to increase investment in employee well-being this year. Wellbeing is fast becoming a critical KPI- not merely optional. Firms lagging in this area risk reputational damage or falling behind in ESG and HR standards. This signals a growing recognition that nurturing staff health is essential – not just ethically but strategically, as poor wellbeing erodes performance, morale and resilience across the sector. 

Governance

• The UK government is moving to bring ESG ratings providers under Financial Conduct Authority (FCA) regulation, with rules expected in Q4 2026 and implementation by 2028. The reform addresses long-standing concerns over inconsistent methodologies, opaque scoring and conflicts of interest in ESG ratings, which are widely used by investors, insurers and corporates. Under the new regime, providers will require FCA authorisation, alongside stronger requirements on governance, transparency and disclosures. This will increase reliance on robust, comparable ESG data, while also raising accountability for how ratings are used in decision-making. The move aligns the UK with global efforts to tackle greenwashing and improve market integrity.

• Legal analysis by K&G Gates shows climate change litigation is expanding beyond governments to target companies, boards and financial institutions, creating fresh legal and insurance risks that UK banks and insurers must confront. Cases alleging “climate‑washing” or misleading environmental claims are among the most common strategies used by claimants to hold organisations to account for environmental assertions, even as litigation targeting private actors grows. Approximately 20% of climate cases filed in 2024 were against companies and their directors and officers, highlighting the risk of liability for corporate conduct and disclosures. Beyond greenwashing, broader litigation globally is diversifying, with claims linked to climate impacts and governance practices.

• In January 2026, the House of Commons Treasury Committee published its report on Artificial Intelligence in Financial Services, warning that the regulators’ “wait and see” approach risks serious harm to consumers and financial stability if AI adoption continues to outpace controls. The Committee note that 75% of UK financial services firms now use AI, with the highest adoption in insurance and international banking. The Committee called for HM Treasury to designate major AI and cloud providers as critical third parties by the end of 2026 and urged the Bank of England, PRA and FCA to set clearer expectations around AI risk management, transparency, accountability and resilience.

• The Bank of England’s Prudential Regulation Authority (PRA) has confirmed that since 1 December 2025, the Financial Services Compensation Scheme (FSCS) deposit protection limit will increase from £85,000 to £120,000 per eligible depositor, per bank. The change is designed to align the UK with other major jurisdictions, enhance financial stability and protect a greater share of individual and small-business savings in the event of bank failure. It comes amid ongoing concerns about inflation, cost-of-living pressures and confidence in financial institutions. For the financial and insurance sector, the higher cap strengthens governance and risk frameworks by improving depositor safeguards, reducing systemic risk and setting clearer expectations for crisis readiness. Banks and building societies will need to reflect the change in customer communications, risk disclosures and contingency planning.

Real Estate & Rental & Leasing

Environmental 

• Energy-efficient buildings bring more returns for investors. Expected upcoming changes to the Minimum Energy Efficiency Standards for non-residential property, like implementing EPC C by 2027 and B by 2030, will raise the “risks to value” in relation to energy inefficient property. CBRE’s Sustainability Index 2024 shows that since the index started in Q1 2021, energy-efficient commercial property assets have recorded total returns of 16.2% compared with 11.2% for inefficient ones. CBRE’s H1 2025 update shows that returns for efficient buildings across all types of property stood at just over 20%, compared to just over 15% for inefficient ones (with the gap in returns for industrial assets reaching the largest in the index’s history), amid “increasing appetite for energy efficient assets from both investors and occupiers”. According to JLL, in 2025, about 40% of the UK office development pipeline was targeting net zero, with low-carbon buildings becoming standard and asset owners having to upgrade existing building stock to remain competitive and meet rising market expectations.
• According to the Centre for Cities, about 12% of commercial properties in the UK missed an energy rating deadline in 2023, with buildings in the UK facing stringent deadlines to upgrade energy efficiency ratings by the end of the decade, as reported by the Financial Times. An article by the Financial Times from October 2024 has stated that a significant amount of property assets face being “stranded”, echoing comments made by former central banker Mark Carney, with substantial costs for upgrading buildings to required standards. In its 2023-24 reports, British Land stated that retrofitting its portfolio would cost £100 million to meet EPC ratings of A or B by 2030. It is making progress on that front, with 72% of its portfolio rated EPC A or B in its H1 2025-26 update, up from 68% for 2024-25. Meanwhile, Land Securities launched a £135 million net zero transition investment plan in November 2021. Knight Frank estimates from September 2024 showed that circa 70% of floor space in England and Wales had an EPC rating of C or below. As such, the Financial Times estimates that about £700 billion worth of non-residential building stock is at risk.
• Research by The Mortgage Works, an arm of Nationwide, found that 67% of landlords were unaware that rented homes will require a minimum energy-efficiency rating of C when tougher energy efficiency rules come into force in October 2030. The research also found that seven out of 10 didn’t know when the new rules would take effect, leaving many landlords at risk of leaving it too late to complete improvements.
• Knight Frank’s ESG Property Investor Survey 2025 has found that 69% of respondents cited internal net-zero commitments as a key driver of their ESG investment strategy. Meanwhile, retrofitting leads as the primary ESG-related investment approach, with 76% of respondents prioritising upgrading existing assets. 41% recognise securing funding as a motivation for ESG due diligence. Further, the 2025 Knight Frank (Y)OUR SPACE report, which captures the views of respondents directly managing some 650 million sq ft of space globally, found that just 18% listed sustainability and ESG commitments among their top three priorities. It reveals that in London, lettings of new or refurbished office space (typically achieving or targeting a minimum EPC B rating) reached a record high in Q2 2025, with 2.6 million sq ft signed, over 74% of total leased space.
• Landmark Information Group’s February 2026 review notes that climate risk assessment has moved from “recommended to required” across conveyancing, development finance and planning. Climate reports are now widely embedded in property transactions, with lenders expecting location‑specific flood, heat and subsidence risk analysis.  
• The UK government’s January 2026 progress report on its “decade of renewal” for social and affordable housing confirms that all social households are expected to achieve a “good” level of energy efficiency by 2030, with further decarbonisation measures installed before 2039. 

Social

• Women in the real estate sector remain underrepresented in senior leadership positions at agencies. According to Deloitte, in April 2024, women represented just 14.5% of the total positions at the C-suite level. Many women are facing barriers to progression and are leaving the sector amid career stagnation, inflexibility and male-dominated cultures.
• Gender pay differences are also prevalent. JLL’s 2025 report states that while pay gaps are narrowing, the real estate sector shows larger gaps than other industries. Analysis of top firms by Property Week from April 2024 found that the median gender pay gap was 22.8%, down from 24.8% in 2022.
• Continuously rising rents across the UK are causing severe pressure on tenants, particularly younger and older people who have squeezed budgets, with properties in the UK becoming unaffordable. According to data from the ONS, on average, the share of private rent of household gross income reached 36.3% in 2023-24, up from 33.1% in 2022-23 and above the 30% threshold that it defines as affordable. This points toward worsened housing affordability in England.
• Phase 1 from the Renters’ Rights Act 2025 abolishes assured short hold tenancies and introduces no-fault evictions, restricting annual rent increases and banning rental bidding and large rent‑in‑advance demands. It also embeds anti‑discrimination measures and strengthens council investigatory powers. 

Governance

• Net-zero mandates and growing sustainability regulation targets are putting pressure on the sector. The government has announced proposals to amend the Minimum Energy Efficiency Standards, with a target for commercial buildings to achieve an Energy Performance Certificate (EPC) rating of B, potentially as of April 2030. Analysis by CBRE from 2022 found that around 60% of commercial stock could fail to comply with the 2030 deadline, highlighting the challenge for properties to meet the target in time. It also estimates that 58% of office stock, in terms of square feet, in Central London has EPC ratings below B.
• The Renters’ Rights Act received Royal Assent on 27 October 2025, with phased-in introduction from May 2026. It is set to transform the market and introduce increased protections for tenants, like the removal of “no fault” evictions, causing many landlords to exit and drawing some criticism from the real estate market. A survey of 250 UK letting agents by Alto has found that 70% have seen some of their landlords already selling off properties, while 93% were concerned about losing independent landlord clients directly as a result of the reforms.
• According to the Financial Times, major London landlord, Criterion Capital, has started issuing eviction notices to tenants ahead of the government’s new renters’ reform law coming into force in May, which will curb the use of so‑called “no‑fault” evictions and strengthen tenant protections. Landlords have argued that the legislation will shrink rental supply and trigger more disputes. Analysis by Savills reveals that 254,000 buy-to-let properties in Great Britain came on to the open market in the 12 months to the end of March 2026, with figures 9% above the level in the year to March 2025, and 28% above that to March 2024. This indicates that more landlords are putting up their properties for sale in response to regulatory and tax pressures.
• Property assets with strong ESG credentials and transparent governance attract the most investment. The UK ranked first in the JLL Global Real Estate Transparency Index 2024, the global real estate industry’s most widely used benchmark for assessing market transparency and guiding cross-border investors, lenders, developers and occupiers of real estate. The UK ranked first in four out of the six factors, including investment performance, listed vehicles, regulatory and legal, and transaction process. Markets showing the greatest transparency will continue to pull ahead and be favoured by investors.
• The government has capped ground rents paid to freeholders on existing properties in England and Wales at £250, with the legislation expected to come into effect in late 2028. The government expects the cap to deliver savings for about 770,000 to 900,000 leaseholders during this parliament.
• In June 2026, the UK Government confirmed reforms to the home-selling process that will require sellers to produce key information to buyers before they list a property for sale. The aim is to reduce the average length of time required for a transaction by requiring vendors to prepare information upfront in “sales packs”. Required information is expected to include details of the property’s condition, local authority searches, any leasehold costs and its status in the chain. 

Professional, Scientific & Technical Services 

Environmental

• Analysis from a survey of 100 UK-based law firms by Greenarc reveals that only about 51% of legal firms listed sustainability as a priority and 66% claimed they had sustainability targets in place. However, this lags behind other areas, with 92% of firms placing cybersecurity as the top focus area, followed by cost management (81%) and digital transformation (68%).

• Within the professional services sector, sustainability initiatives are of growing importance as sustainability commitments and performance help attract and retain clients and talent. Failure to set out a clear sustainability strategy could result in reduced competitiveness. A July 2025 report on sustainability and ESG in the top 50 UK law firms by Saffery states that 48 out of the 50 firms have set climate-related goals, though just nine have committed to carbon reduction by 2030 or net zero by 2050. However, the report also highlights that 34% of all firms still don’t publish an annual Responsible Business report and just 14% have conducted a sustainability materiality assessment.

• Accounting firms have also stepped up their game to showcase strong environmental commitments. For instance, in its 2024 UK Sustainability Report, Forvis Mazars brought forward its net zero emissions target across its operations and value chain from 2050 to 2045, highlighting its strong commitments to ESG. According to NatWest’s Accountancy Benchmarking Report 2024, 41% of firms stated ESG issues were regarded as a moderate priority, while 36% stated it is one of their stronger priorities.

Social

• With evolving ESG reporting regulations, accounting firms face growing responsibilities and pressure to meet requirements. However, various reports state that there is a growing shortage of skilled accountants in the UK, which could pose a potential challenge for firms to manage these increasingly complex reporting regulations. ICAEW’s Mid-Tier Evolution report from July 2025 states that 43-44% of firms ranked future‑proofing skills among their top three talent challenges and that 75% rated investment in upskilling existing staff as a high priority for their operating models over the next three years. Given the skills gap in the industry and firms’ changing needs, ICAEW has announced it will update its ACA qualification from September 2025 to address evolving demands in business, finance and accountancy.
• A global survey of 500 accounting leaders by outsourcing specialist Advancetrack found that 73% are now turning away potential clients due to insufficient staff, exposing the severity of the talent shortage gripping the accounting profession. Some 45% report the shortage has worsened over the past three years, with the most commonly cited consequences being reduced operational efficiency (28%) and rising staff stress and anxiety (27%). This points to a deepening workforce well-being crisis within professional services, where chronic understaffing is directly eroding both service quality and employee mental health.
• Pay gap and female representation issues continue to plague the professional services sector, with law firms, consultancies and accounting firms often scrutinised. The Financial Times reports that a study by the International Bar Association on 170,000 lawyers across five continents shows women make up 47% of all lawyers, but account for only 38% of lawyers in senior positions. The gap between women in the profession and those in leadership positions is particularly pronounced in England and Wales. In their most recent filings, EY’s target falls short, at about 28% against a 40% UK target, while PwC trails slightly behind its 30% target. The Big Four have all set targets to increase their proportions of female partners, which would help in reducing their gender pay gaps.
• The UK legal market has endured significant labour pressures, with intense competition for talent. The Financial Times reports that Magic Circle firms offered 20% pay increases to junior lawyers last year in an effort to overcome competition from US firms’ London offices. A 2025 study by OneAdvanced found that 32% of law firms placed talent attraction and retention as a core business priority for the next year. Meanwhile, a survey of 1,680 lawyers at 110 top UK law firms conducted by legal rankings company Chambers and Partners found that two in five associates plan to leave their jobs in the next five years amid significant stress and insufficient support from their employers.
• According to an analysis of company reports by the Financial Times, UK mid-tier accountancy firms have sharply increased partner profit, narrowing the pay gap with the Big Four as they win more higher-margin work and benefit from consolidation and regulatory constraints that have pushed some mandates away from the largest companies. It shows average profit per equity partner at the five biggest mid-tier firms reached about £565,000 in 2024 (around two‑thirds of the Big Four average).

Governance

• The accounting industry continues to face regulatory changes, but has avoided the long-awaited Audit Reform Bill, which was dropped by the UK government. The Department for Business and Trade has said it didn’t want to add significant new costs for big companies and argued that audit and reporting practices have improved, while signalling a shift towards “modernising corporate reporting” instead.
• The Financial Reporting Council (FRC) has ordered audit firms to disclose approaches from private equity (PE) amid a trend of PE firms investing in the UK accounting industry and the potential risks this brings, including eroding audit firms’ independence in auditing large companies’ accounts, as per the Financial Times. AccountancyAge’s Top50+50 Accountancy Firms 2024 survey has found that 35% of firms in the top 100 have bought or sold a firm in the last 12 months, while a 2025 report by chartered accountancy body ICAEW exploring the evolution of mid-tier firms, 86% of respondents ranked private equity as one of the top three macro trends impacting the profession, up from 57% in the prior year. Additionally, 25%% of firms said they had secured private equity investment (up from 12% in 2024), while another 25% said they would like to secure PE investment in the next three years through 2028 (up from 12% in 2024), highlighting the substantial activity in the market.
• Legal and advertising services have also faced their share of regulatory changes. According to the Institute for Government, the plans to scrap the right to a jury trial for defendants facing possible sentences of less than three years in England and Wales, amid a target to ease the backlog of cases, would save less than 10% of court time.
• Law firms are increasingly deploying generative AI for drafting and legal research to boost efficiency. However, a growing number of cases have surfaced involving fabricated citations and inaccurate legal arguments generated by these tools, exposing firms to material professional liability and reputational risk. These incidents highlight governance gaps around confidentiality, quality control and regulatory compliance. Recently, London's High Court formally reprimanded top UK law firm Pinsent Masons after a junior lawyer twice misquoted a statute in an insolvency application using an AI tool, with the errors only detected when the presiding judge challenged the citations directly. This reinforces calls for stronger internal risk controls, mandatory verification protocols and clearer accountability frameworks as generative AI adoption accelerates across the legal profession.
• The BBC's investigation into the collapse of Sheffield-based law firm PM Law has revealed a suspected £39.5 million client money fraud, marking one of the most serious governance failures in the UK legal sector this year.

Education

Environmental

• As the UK endures a period of prolonged hot weather, many in the education sector are speaking up about how schools in the UK aren’t built to cope, making it uncomfortable for students and teachers. A May 2026 article by The Guardian calls the lack of a plan for the impacts of the climate crisis a “failure”, citing Beaconsfield Primary School in West London, which has one building over 130 years old with very thick brick walls. The Financial Times also reported in June 2026 that parents in England were buying air conditioning units for schools to help pupils cope with the heat, that a number of headteachers had decided to send pupils home early or close entirely to manage the heat, while teaching unions warned that many buildings are not equipped to deal with extreme weather events. As the frequency of extreme weather events increases, it could require extra investment to ensure school buildings are designed with extreme weather in mind. 

Social

• Debated through 2025 and into January 2026, the Children’s Wellbeing and Schools Bill reflects a push to improve equity, attendance and child welfare in education. Measures include breakfast clubs, attendance registers and stronger safeguarding frameworks. While legislation is progressing, many provisions are expected to roll out from early 2026 onwards. The reforms aim to reduce inequality and improve outcomes for disadvantaged pupils, while increasing oversight of school performance and governance. For the sector, this signals rising expectations on inclusion, transparency and accountability.
• In January 2026, the UK government abandoned its target of recruiting 600,000 international students a year to UK campuses, instead pivoting to a strategy that promotes overseas education hubs and global partnerships to grow “education exports” to around £40 billion by 2030. This marks a significant policy shift in higher education and workforce planning. Under the new approach, universities and colleges are encouraged to establish campuses and partnerships abroad, while stricter visa compliance measures will ensure that students coming to the UK are genuine learners.  
• Low pay and excessive workloads undermine teacher retention. A recent cross-country review spearheaded by Universitas 21 and supported by the University of Nottingham reveals a mounting social challenge in education. Low pay, heavy workloads and diminished professional status are driving sustained teacher shortages in the UK, a study by Universitas 21 and the University of Nottingham reveals. The report emphasises that while many governments and education authorities have introduced pay rises, incentive payments, bursaries and workload-reduction initiatives, these efforts lack consistent impact assessments. As a result, strategies remain largely unvalidated – potentially perpetuating ineffective or inequitable policies. Crucially, the shortage of teachers is most acute in marginalised and underserved communities, notably in rural areas and within STEM and special education fields.  
• Ofsted’s annual report warns that while education and social care professionals are working tirelessly under immense pressure, systemic strain is hitting vulnerable and disadvantaged children hardest, particularly those with special educational needs and disabilities (SEND), who face inconsistent support and delayed interventions due to weak partnership working, poor data use and patchy commissioning. Recruitment and retention crises across classrooms, nurseries, colleges and care settings are compounding these issues, deepening attendance gaps and leaving learning fragmented. The regulator highlights the persistence of “childcare deserts” in disadvantaged areas and a shortage of foster carers and children’s homes, with many young people placed far from families and communities due to poor geographic distribution of provision. Governance concerns extend to safeguarding, with rising flexi-schooling, unregistered settings and non-compliance with rules requiring every school to appoint a qualified SENCo. In response, the regulator reformed its own approach – scrapping one-word judgements in favour of more detailed school report cards from September 2024 and planning changes to social care inspections by 2026. This signals that governance reform must go hand in hand with addressing the root causes of inequity in education and care.  
• Data from the Department for Education shows a 11.6% rises in the number of pupils with an education, health and care plan in schools in 2025-26 compared to 2024-25, bringing the total number over 500,000. This increase comes amid the government’s ongoing plan to reform the Special Educational Needs and Disabilities (SEND) system through the Education for All bill, which focuses on providing early support, stronger protections and new legal duties, expected to be enacted from 2029. The rising number of pupils requiring additional support continues to pose a challenge for the government as it seeks to ensure no pupils are left behind, whilst also managing rising SEND spending.
• From September 2026, teachers will receive a pay rise of 3.5% after it was confirmed by the government in response to the school teachers’ review body report. While this is good news for teachers, it could lead to strike action, as the government stated that schools will be expected to fund around a third of teacher and support staff pay increases from existing budgets, despite unions threatening to strike unless the pay increase is fully funded. In July 2026, the country’s largest education union, the National Education Union, launched a formal strike ballot over the pay and funding announcement. 

Governance

• Widely reported through 2025 and into 2026, UK universities are facing a financial sustainability crisis, driven by frozen tuition fees, falling international demand and rising costs. No single implementation date applies, but pressures have intensified since post-pandemic funding constraints and 2024 visa changes. Institutions are cutting courses and staff, raising concerns about the quality of education, access and workforce stability. Analysis by The Guardian, based on the latest data from the British Academy, revealed that in the year to December 2024, nearly 4,000 academic posts in the social sciences, humanities, and the arts had been cut. Critics warn that this trend risks undermining academic quality, research capacity and the UK’s global reputation in higher education. As part of the Budget 2025 policy, a fee levy on international students was confirmed (a flat £925 per student from 2028), adding to cost pressures as universities adjust their revenue models.  
• In 2026, reforms to align education and training with labour market needs are gaining traction, including proposals to prioritise medical and specialist training placements. Implementation is expected from 2026 onwards, depending on legislative progress. The aim is to address workforce shortages and regional inequalities in skills provision. In a speech launching his campaign to replace Keir Starmer as Prime Minister, Andy Burnham stated that a complete rethink of how young people are supported to succeed must start with the education system and that “the days of a school system configured entirely around the university route will be brought to an end”. For the education sector, this reflects a broader shift towards demand-led training, accountability in outcomes and alignment with economic needs.
• Governing bodies urged to reassess oversight on fiscal leakages. Chancellor Rachel Reeves’s Treasury misjudged parental reaction to the introduction of VAT on private school fees. Forecasts estimated only £90 million of advance payments would evade tax – but in reality, parents poured a staggering £515 million into prepayment schemes across the 50 largest schools. This overwhelming response highlights a serious flaw in the policy’s design and underscores broader issues around fiscal forecasting, stakeholder behaviour and policy resilience. It also hints that there was likely inadequate risk analysis, underestimated behavioural responses and gaps in regulatory oversight that allowed significant tax avoidance. For policymakers and education leaders alike, it reinforces the need for governance frameworks that better anticipate reactions and close loopholes before policy rollout. In this case, the VAT’s revenue-generating goal is now under threat – not just financially, but reputationally, as the government is seen as out of touch with real-world incentives.  
• The Office for Students (OfS) has flagged mounting financial fragility across the sector. Lower international enrolments and higher labour costs threaten university budgets, putting over 10,000 jobs at risk. The OfS found in May 2026 that 43% of UK universities were likely to have ended the 2025-26 academic year in a deficit after overly optimistic attempts to boost student recruitment.
• In 2022, the government stated that it aimed for all schools to join multi-academy trusts (MATs) by 2030. Currently, the government still has the same aim for schools in England, but there is no longer an end date. This means larger oversight by the government to ensure schools are moving into a MAT. Due to this push, the government has published plans to introduce inspections of MATs to give parents and communities greater confidence that schools are part of strong, supportive trusts focused on improving pupil outcomes. However, in July 2026, the Times Education Supplement reported concerns that poorly designed inspections could deter strong trusts from taking on struggling schools in disadvantaged areas. 

Healthcare & Social Assistance

Environmental

• Announced in September 2025, the NHS has committed to becoming the world’s first net-zero health system, cutting emissions across estates, supply chains, transport and clinical care. Progress includes large‑scale energy efficiency upgrades, expansion of renewable power, greener inhalers, reduced anaesthetic gas use and lower‑carbon procurement standards extending to 2040-50. Government backing through net zero policy and NHS England guidance has helped accelerate change, while suppliers are increasingly required to meet tougher carbon reporting and reduction standards. The trend signals a broader ESG transition across health and social care, where environmental performance is becoming integral to patient outcomes, system resilience and regulatory expectations.
• On 9 June 2026, NHS England published updated guidance on Carbon Reduction Plans (CRPs), tightening requirements for suppliers (companies that provide goods, services or works to the NHS, like pharma, medical devices and IT providers)  from 1 April 2027: CRPs must cover global operations and all relevant Scope 3 emissions (indirect emissions from the supplier’s value chain), not just UK Scope 1–2 plus a subset of Scope 3 (Scope 1 are direct emissions from sources the supplier owns or controls, like company vehicles and onsite fuel; Scope 2 are indirect emissions from purchased energy like electricity, steam or heating).

Social

• Tightening UK migration policies are raising concerns about worsening skills shortages in health and social care, a sector heavily reliant on international workers. According to the King's Fund, between March 2022 and March 2024, 185,000 people started direct care roles after arriving from abroad. In 2024-25, a further 50,000 joined from overseas. Recent restrictions on visas threaten overseas recruitment. In July 2025, the government closed entry-clearance applications for new overseas Care Workers and Senior Care Workers under the Skilled Worker Care route. In December 2025, the Home Office proposed that social care staff who arrived on Health and Care visas from February 2022 would have to wait 15 years, rather than five, before they could apply for permanent residency. Changes to international recruitment threaten to increase vacancy rates in adult social care roles, especially as domestic workers aren’t attracted to the sector. Dissatisfaction with pay is a significant issue in recruiting domestic residential nursing care workers. The King's Fund reports that the number of domestic workers in social care fell by 85,000 between 2020-21 and 2024-25. Despite pay rising above inflation since 2014, the rate of pay rises has failed to keep pace with other sectors.
• The introduction of the Medical Training Prioritisation Bill, which has now received Royal Assent and is in force as the Medical Training (Prioritisation) Act 2026, with the legislation formally passed on 5 March 2026, has been welcomed across the UK health sector as a step toward addressing geographic and speciality workforce shortages. The act introduces a legal framework to prioritise certain groups of doctors for foundation and speciality training. For foundation training places from 2026, priority goes to graduates whose primary medical qualification is from the UK or the Republic of Ireland, plus certain European Economic Area (EAA) countries (Iceland, Liechtenstein, Norway and Switzerland) linked to trade agreements. For speciality training places from 2026, the prioritised groups include UK and Irish graduates, those from the same EEA countries and doctors who have completed or are on relevant UK training programmes. The NHS Confederation notes this could help rebalance the distribution of healthcare workers, especially in under-resourced regions and specialisms like mental health, geriatrics and rural general practice. With ongoing challenges in staffing levels, long wait times and unequal access to care, the bill supports long-term workforce planning tied to health equity goals.
• The 2023 NHS Long-term Workforce Plan estimated that the staff shortfall will grow to between 260,000 and 360,000 by 2036-37 unless there’s substantial investment in training and recruitment. The 2023 NHS Long-term Workforce Plan targets job growth in primary care through 2036-37, helping drive growth in the number of specialist medical providers. The target is to double medical school places to 15,000 by 2031 and grow the entire healthcare workforce by 65-72% between 2021-22 and 2036-37. Parallel to this, the NHS is trying to reduce reliance on international staff. According to the BMA in May 2026, the NHS aims to reduce the international recruitment rate for new NHS staff in key roles from 24% to 9%-10.5% by 2036-37. This will expand the pipeline of domestically trained professionals, helping to address workforce shortages and ensuring specialist hospitals can meet rising demand.
• GPs continue to face the highest pressures across the medical workforce. The State of Medical Education and Practice survey 2025 reported that 44% of GPs struggle with their workload compared with 29% of all doctors and 32% of GPs cite workload pressure as a barrier to providing care. These are critical issues, given the drive to shift more healthcare into community settings. Training and development are also under strain as underfunding and lack of infrastructure mean some GP practices struggle to recruit new doctors. Locally employed doctors, trainees and trainers report insufficient access to career progression opportunities.  
• Despite notable progress in workforce diversity, the UK’s medical sector continues to face systemic inequities that disproportionately affect disabled doctors and UK-qualified ethnic minority doctors, according to the GMC’s 2025 State of Medical Education and Practice report. The report finds that in 2024, only 52% of ethnic minority UK graduates reported satisfaction with their roles, compared to 58% of white UK graduates. Burnout risks were also higher: 24% of ethnic minority UK graduates were classified as high risk, versus 18% of white UK graduates. Feelings of inclusion were similarly unequal – 74% of ethnic minority doctors felt part of a supportive team, compared with 80% of their white peers. The situation is equally stark for disabled doctors. In 2024, just 44% of disabled doctors reported job satisfaction, compared to 51% in 2023 and 61% of non-disabled doctors. Burnout risk among disabled doctors rose to 34%, significantly above the 19% recorded among non-disabled colleagues. These figures are particularly concerning in the context of a rapidly changing workforce. In March 2025, the GMC reported that female doctors now outnumber male doctors in the UK for the first time. Meanwhile, the share of black or black British applicants to UK medical schools grew from 6% to 10% between 2013 and 2022 and Asian or Asian British applicants rose from 27% to 29%. Despite these demographic shifts, lived experiences remain unequal. UK-qualified ethnic minority and disabled doctors continue to encounter bias, exclusion and lack of trust from senior colleagues – all contributing to heightened anxiety and attrition risk. The GMC has set ambitious targets: eliminate disproportionate employer referrals by 2026 and remove inequality in training pathways by 2031. Efforts include revamping medical education standards, strengthening support for educators, and building fairer, more inclusive workplace cultures. 

Governance

• Rising concerns in January 2026 highlight the growing impact of medical tourism complications, with estimates suggesting follow-up treatment can cost the NHS up to £20,000 per patient. Increasing numbers of UK patients are travelling abroad for procedures – often to avoid waiting times – but returning with infections, surgical failures or incomplete aftercare. There is currently no formal regulatory framework governing overseas treatment pathways or post-operative accountability, creating governance gaps around responsibility, data sharing and continuity of care. For the NHS, this trend adds pressure to already stretched resources and raises concerns about patient safety and system efficiency.
•  The Institute for Government’s Performance Tracker 2025 highlights persistent challenges in England’s adult social care system, revealing a wide “care gap” where access to services depends more on location and local deprivation than on individual need. Despite spending on publicly funded adult social care rising significantly in recent years – potentially approaching £30 billion in 2025-26, the increase hasn’t translated into proportionate improvements in care access or outcomes. Much of the extra funding has been absorbed by rising provider fees driven by wage and cost pressures, rather than expanding service provision. The ageing population and expanding market for social care, like residential homes, reduces the real value of funding increases because it is distributed over a greater volume of people. Some funding growth stems from council tax increases rather than long‑term sustainable budgets.
• The Children’s Wellbeing and Schools Act 2026 entered force in April 2026. It's a wide-ranging education and children’s policy package designed to strengthen both social support and governance in schooling and children’s services. The Act combines measures on children’s social care, including kinship care, protection and care leavers, with reforms at the school level covering breakfast clubs, pupil attendance registers, uniforms, teacher standards and school admissions.
• The legislative effort reflects growing focus on equity and wellbeing in education: breakfast club proposals aim to tackle child hunger and attendance gaps. The free breakfast clubs scheme was introduced in April 2025 and initially involved an estimated 750 schools; since then, it’s expanded. Backed by £80 million of additional funding, the Department for Education plans to onboard a further 2,000 primary schools onto the scheme between April 2026 and March 2027, while registers of children not in school seek to address rising absence and disengagement. Changes to academy governance and teacher conditions indicate ongoing government attempts to balance school autonomy with accountability.

Arts, Entertainment & Recreation

Environmental

• UK museums and galleries are increasingly embedding climate action into programmes and operations, reducing environmental impacts and engaging audiences with climate-related narratives. Organisations like the UK Arts Council are supporting the creative and cultural sector to prioritise environmental responsibility in how they work – positioning environmental stewardship as an ESG priority for arts and culture. Art Fund’s 2025 climate action case studies show UK museums and galleries using exhibitions, community projects and storytelling specifically to address the climate crisis, while also reducing the environmental impact of their programmes. The trend reflects rising pressure on cultural organisations to align with national net zero goals while managing escalating energy costs and climate-related risks to collections. For cultural institutions like museums, sustainability is no longer just an ethical issue but an operational one, linked to resilience, funding eligibility and long-term asset protection.
• Regional bodies like the Museum of London and the London Museum Development team are running Climate Action grants for 2026-27, offering training and project funding to help museums cut emissions, adapt buildings and develop climate-related public programming.

Social

• A Charity Times 2025 “year in the news” roundup highlights how UK charities – and by extension much of the arts, entertainment and recreation sector – are grappling with financial strain, falling income and volunteer shortages, while also engaging with innovation like artificial intelligence. Rising costs, cuts and closures have forced many organisations to restructure, reduce staff or shut services amid higher demand and tougher fundraising conditions. The sector also faces pressures around recruitment and retention of volunteers, which underpin many cultural and recreational activities. Research for Royal Voluntary Service in 2025, by Nottingham Trent University, estimated a shortfall of three million volunteers over the following year, with 44% of charities reporting rising demand for help and 27% saying they cannot meet demand, underscoring recruitment and retention challenges.
• Eastside People’s sector-wide ESG survey for charities and social enterprises 2025, reveals a landscape eager to engage with ESG yet trailing in implementation. Although 43% of charities describe their ESG reporting in their most recent annual report as minimal and only 5% have a holistic ESG strategy, 50% are "considering developing" their approach, highlighting intent even if action is nascent. Social concerns dominate – staff wellbeing and flexible working rank high in priority and nearly threequarters of respondents already pay the Real Living Wage, despite 26% being unable to do so. 97% of participating organisations rated understanding the social impact of their activities as important. However, when it comes to equality, diversity and inclusion, the charities that participated perform poorly with 24% having no one from Black, Asian or other racially minoritised communities on their senior executive leadership team or board. 

Governance

• Since January 2026, new Gambling Commission rules have been enforced, strengthening protections for consumers. Measures include limits on bonus wagering requirements and bans on mixed-product promotions, aimed at reducing gambling-related harm. Companies must overhaul marketing and compliance frameworks to meet stricter standards. The reforms reflect growing regulatory focus on consumer wellbeing and ethical engagement, particularly for vulnerable users.
• Affordability checks remain a key regulatory focus following earlier proposals in the UK Gambling White Paper. Companies are expected to assess customer spending behaviour to prevent harm, though implementation remains phased and contested. Industry concerns focus on customer friction and revenue impact, while regulators emphasise harm reduction and financial protection. The trend highlights increasing expectations for data-driven responsible gambling practices.
• In 2026, gambling advertising and sponsorship – particularly in sport – are under growing scrutiny as regulators and campaigners push for tighter restrictions. This builds on ongoing ASA enforcement and White Paper measures from 2024 onwards. Companies must ensure ads do not appeal to children or mislead consumers, with more pressure to reduce exposure in sports partnerships. Industry responses include voluntary sponsorship codes and safer advertising commitments. The ASA issued a fresh Enforcement Notice in June 2026 on gambling ads with strong appeal to under 18s, stating that such ads must not appear on social media and announcing proactive monitoring and targeted enforcement from 11 June 2026. The shift reflects rising ESG expectations around consumer protection and ethical marketing.
• References to older unfair trading regulations are also being updated to reflect the new Digital Markets, Competition and Consumers Act (DMCCA) 2024, modernising compliance obligations. These reforms aim to improve operator governance, promote clearer marketing practices and reduce potential harm to consumers, particularly vulnerable players. Industry stakeholders will need to revise internal compliance frameworks and promotional practices to align with the updated regulatory regime. The focus on transparency and responsible incentives reflects wider expectations for stronger social safeguards within regulated entertainment sectors. In 2026, the government confirmed detailed DMCCA rules for consumer subscription contracts, including clearer pre contract information, straightforward “click to cancel” exit routes, 14 day initial and renewal cooling off periods and mandatory renewal reminders – these changes will apply from spring 2027. At the same time, new statutory instruments implemented Chapter 4, Part 4 of the Act, replacing the old voluntary alternative dispute resolution (ADR) framework with a mandatory accreditation system for alternative dispute resolution providers in consumer contract disputes, so traders in gambling and other entertainment sectors must now ensure any ADR schemes they use are properly accredited under the DMCCA.

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