UK firms face climate revenue hit, Capgemini finds

Capgemini found that 84% of UK organisations have experienced climate change impacts on revenue, pointing to a sharp rise in reported exposure among businesses.

Only 5% said they had fully quantified the financial effect of climate-related risks in the UK market. The figures suggest a gap between reported disruption and companies' ability to measure its cost.

The findings form part of a wider global study of 2,100 executives at 701 organisations with annual revenue above USD $1 billion across 13 countries. Across that broader sample, 15% said they had fully quantified the financial impact of climate-related disruption.

Climate events are also affecting supply chains. Nearly nine in 10 organisations in the global research said climate-related events had disrupted their supply chains, while 68% of executives said their organisation actively prioritised climate adaptation, up from 56% a year earlier.

Exposure gap

For UK companies, the findings suggest awareness has risen faster than practical readiness. Just 28% said they had carried out climate-risk assessments across their extended value chain, leaving many exposed to disruption among suppliers, logistics networks and access to materials.

The figures come after a summer the Met Office identified as the UK's hottest on record, adding scrutiny to how companies prepare for weather-related shocks, water stress and supply interruptions. The research argues that climate pressure is shifting from a sustainability issue to one of revenue and business continuity.

Globally, more than seven in 10 executives said securing access to critical resources, including energy, water and materials, now had more influence on sustainability decision-making than emissions-reduction targets. More than three-quarters said their organisation was accelerating efforts to integrate energy and resource resilience into business and sustainability strategies.

Water risk is becoming more prominent in those calculations. In the global sample, 61% of executives said water scarcity would present a greater constraint on business growth than energy availability over the next five years.

Investment shift

Capgemini's findings also suggest sustainability spending is being framed more directly around commercial returns. In the UK, 77% of executives said sustainability investments were driven by business value.

That aligns with global figures showing nearly seven in 10 organisations reported a net positive return on investment from sustainability initiatives. Almost two-thirds of executives said such investments had increased sales, while 74% said sustainable practices had strengthened brand equity.

Businesses also appear willing to spend more. Across the global sample, 83% said their organisation would increase climate adaptation spending over the next 12 to 18 months, and average spending on sustainability initiatives reached 1.04% of revenue last year, above the 0.8% initially allocated.

In manufacturing and other asset-intensive sectors, nearly two-thirds of executives said those investments had improved operational efficiency under supply constraints. Slightly more than half said the spending had improved their ability to anticipate and respond to operational and supply-chain disruption.

Net zero strain

Even so, the research points to pressure on climate targets. Globally, 84% of organisations said they had set science-based targets, but only 42% said they were on track to meet their 2030 goals or interim milestones.

The share falling behind on net zero goals rose to 11% from 1% a year earlier. Another 29% said they had postponed their net zero objectives, compared with 8% the previous year.

Measurement remains a major obstacle. The proportion able to measure and collect data across all Scope 3 emissions fell to 34% from 54%, underlining the difficulty many businesses still face in tracking emissions beyond direct operations.

AI trade-off

The study also highlighted tension between the use of artificial intelligence in sustainability work and the environmental cost of the technology. In the UK, 58% of organisations said they used AI to support their sustainability agenda, and 74% of executives said the benefits of generative AI outweighed its negative environmental impact.

Yet 53% of UK respondents said AI had significantly increased their organisation's greenhouse-gas emissions. The figures suggest many companies see AI as useful for sustainability work while also acknowledging that it adds to their emissions footprint.

Globally, nearly two-thirds of organisations said they used AI in sustainability initiatives, while more than a third said they used or planned to use agentic AI in that area. Seven in 10 said AI's sustainability implications were discussed at board level.

Oversight, however, remains limited. Just over a third of executives in the global study said their organisation measured the energy consumption of AI systems and workloads, along with the related carbon footprint.

Geopolitical pressure is also feeding into the shift in priorities. In the UK, 61% of executives said geopolitical disruption had changed how their organisation prioritised sustainability initiatives, bringing energy security, resource access and business continuity more firmly into decision-making.

"Climate change disruptions have become our new normal, and yet there is still a wide gap between business leaders' awareness of the risks and actual implementation. In order to protect their supply chains, operations, infrastructure, and access to essential energy, water, and materials, they can no longer defer climate action," said Cyril Garcia, global head of sustainability services and corporate responsibility and a member of the group executive board at Capgemini.

"It is encouraging to see organizations prioritize adaptation and resilience for sustainable growth. But as climate and political risks evolve, organizations must continue to embed sustainability into their core business strategy and day-to-day operations," Garcia said.