Extreme weather: A wake-up call for stronger strategic planning 

This summer, the UK sweltered through its hottest summer on record. 

The mean temperature between 1 June 1 and 31 August hit 16.1°C, according to the Met Office, which was 1.51°C higher than the long-term meteorological average. This eclipsed some of the country’s fabled heatwaves during the scorching summers of 1976 and 2022.  

In London, office workers coped by slipping from air-conditioned offices to cooled bars and restaurants. Researchers in Cambridgeshire, meanwhile, excitedly announced they had managed to grow rice in the UK for the first time. 

But as many people tolerated, and even toasted, the lengthy stay of hot weather, others were grappling with its deadly and financially damaging consequences.  

Farmers across the country faced widespread crop failure, with England seeing its second-worst harvest on record. The heat tragically also contributed to an estimated 1,147 deaths in UK cities, according to the London School of Hygiene & Tropical Medicine and Imperial College London. 

The bakery chain Greggs further warned its profits would be “below” those seen in 2024, as the hot June weather reduced the popularity of its baked goods, while in June the UK witnessed its first official ‘mega fire’ in the Scottish Highlands. 

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The government’s ongoing commitment to climate-aligned policies shows it recognises the scale of this challenge, with ministers reaffirming a raft of pledges in the latest Carbon Budget Delivery Plan. Yet because the effects of global warming can emerge gradually, and unevenly, the associated risks may often remain overlooked until they become critical.  

An Office for National Statistics survey in late December last year found nearly three in five businesses were not concerned about the impact climate change may have on them. Worryingly, this was up 3% since September 2024 and was the highest proportion of respondents reporting this answer since the question was first asked three years ago.  

So how should the government use policy to help the UK’s business sectors withstand future climate challenges while seizing the opportunities of the net-zero transition? We believe credible and transparent climate transition plans can play a key role in addressing this question. 

These strategic roadmaps can set out how companies will remain competitive as the wider UK economy advances towards a low-carbon future. But beyond mitigating risks, insights from these plans can give business leaders a key commercial advantage and help shape their decisions ahead of changes over the next decades. 

This can be pivotal in unlocking new streams of capital. A Lloyds Bank survey found 68% of investors viewed climate transition plans as ‘important’ or ‘very important’ when making financing decisions. Large UK businesses have already recognised the huge value of transition plans, with data from EY showing that two-thirds have one in place.  

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However, we believe policymakers still have an important role to play in clarifying how transition plans, alongside other measures, can support long-term, sustainable growth. 

We were pleased to respond to the government’s transition plan consultation for large UK companies, including banks, asset managers, pension funds and insurers, this autumn, where we set out suggestions for their workable and proportionate rollout. 

We recommended a ‘pathway approach’ towards mandatory disclosures for companies to maximise their benefits while promoting proportionality in government rules. 

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We also set out how transition plans could be fully integrated into the UK’s Sustainability Reporting Standards (SRS) and wider financial reporting framework. The UK’s Taskforce on Climate-related Financial Disclosures (TCFD) regime offers a positive, familiar starting point for the rollout to large listed and private companies. 

We also agreed with the government’s intention not to include SMEs within the scope of transition plan rules but instead encouraged these smaller businesses to adopt the upcoming UK SME Voluntary Emissions Standard (VES). We hope this can help these groups respond to sustainability information requests more effectively.  

If implemented correctly and effectively across the economy, transition plans can help the UK’s leading sectors position themselves to thrive through the net-zero transition. These blueprints also have the potential to help the vast majority of businesses remain agile, resilient and fundamentally fit for the future. 

The government has the chance to use its commitment to the delivery of transition plans to reaffirm the UK’s global leadership in sustainable finance. With the right policy approach, they can become a crucial tool for attracting investment and delivering growth for decades to come.