The gap between net zero ambition and market reality

Many UK businesses with a serious ESG profile now carry a net zero commitment. It appears in the annual report, in supplier questionnaires, on the website. Boards have approved it. Investors have noted it. In many cases, a third party has verified the framing.

What fewer of those businesses have is a supply arrangement capable of evidencing it.

That is not a cynical observation. It reflects something structural about the UK energy market: the routes that deliver genuine, verifiable progress on Scope 2 emissions are not the routes most buyers end up on. The standard market was not built around today’s disclosure requirements, and most commercial energy arrangements were signed before the scrutiny arrived.

Many large businesses have a net zero commitment. Fewer have a business energy supply to achieve it.

The volume of corporate net zero commitments made in the UK over the past five years is substantial. The pressure moved rapidly downstream: from listed companies to their supply chains, from supply chains to mid-market businesses, from mid-market businesses to the industrial and commercial (I&C) sector as a whole.

The driver was not purely voluntary. Under the GHG Protocol’s Corporate Value Chain Standard — the framework underpinning most mandatory and voluntary disclosure regimes — a large company’s reported emissions include the Scope 2 emissions of its suppliers. When a major retailer or manufacturer asks its supply chain for emissions data, the question flows to facilities-level energy consumption. The commitment is no longer optional for businesses that want to retain or win contracts with buyers under that kind of scrutiny.

What that pressure produced, in many cases, was a commitment — a stated target, a date, often a headline figure — but not a supply structure designed to support the claim.

A green business energy tariff is not the same as evidenced renewable supply

The UK retail energy market offers green tariffs and most large suppliers include them in their product range. A business can sign a renewal, tick the renewable box, and receive a certificate confirming that its electricity was matched to renewable generation.

This certificate is typically a Renewable Energy Guarantee of Origin (REGO). Ofgem administers the REGO scheme and issues one certificate per megawatt-hour of eligible renewable output. REGOs are the primary instrument used by suppliers for Fuel Mix Disclosure — the annual requirement to report the fuel sources behind the electricity they supply. Suppliers purchase them separately from the electricity itself and retire them against customer consumption to substantiate a renewable claim.

The REGO system works, in a narrow technical sense. The electricity the business draws from the grid is matched, on paper, to renewable generation.

What it does not do is link the certificate to the specific generation source, the time at which that generation occurred, or the location of the asset. A REGO retired against a February consumption period may have been purchased from generation that took place at any point in the preceding year. The physical electricity consumed may have come from a gas-fired plant. The match is a financial instrument, not a physical connection.

For disclosure frameworks that accept annual REGO matching, this may be adequate. For frameworks requiring temporal or geographic matching, or for businesses disclosing under standards that call for more granular evidence, it is not — with the regulatory framework becoming more stringent, the gap between claim and evidence is widening 

Why the market steers buyers away from the routes that work

The structures that deliver stronger evidenced progress - principally corporate power purchase agreements (CPPAs) and directly matched supply arrangements - exist. UK generators offer them, and the legal and commercial frameworks are established.

In practice, the market steers most buyers away from them.

CPPAs have traditionally required investment-grade credit ratings, long contract terms, and internal treasury appetite for price risk that most I&C businesses do not carry. Direct generator relationships require volume that most buyers cannot aggregate alone. And the advisory relationships through which most businesses enter the energy market - whether via a broker or a standard supplier renewal - are not structured to make these routes the default. There is rarely a commercial incentive to do so.

Energy UK’s November 2024 report on the CPPA market concluded that government intervention may be required to widen the range of businesses that can access these structures, and identified the divergence of disclosure standards as a source of uncertainty for corporate buyers. The UK Government’s January 2026 call for evidence on the CPPA market, jointly issued by the Department for Business and Trade and DESNZ, explicitly acknowledges that credit requirements and contract complexity are preventing wider commercial and industrial access to direct renewable procurement structures.

The result is that businesses with genuine net zero ambition end up on standard renewable tariffs that meet a minimum disclosure threshold but do not deliver the granular evidence that scrutiny is beginning to require.

This is not a failure of intent. It is a structural problem. The market was not designed around today’s disclosure requirements, and the default advisory model has not caught up.

The ambition gap - when the pledge and the evidence don’t match

There is a measurable gap between a business’ net zero commitment and the supply arrangement required to evidence it.

This gap depends on the disclosure framework the business is working to, the nature of its stakeholder relationships, and the current state of its supply structure. For some businesses it is narrow: they have signed commitments to frameworks that accept annual REGO matching, and their current tariff satisfies that standard.

For others, the gap is larger and growing. The UK Sustainability Reporting Standards, published in final form by the Department for Business and Trade in February 2026 and based on the ISSB’s global standards, require disclosure of Scope 2 emissions as part of mandatory climate reporting proposed for UK-listed companies from 1 January 2027. The SBTi’s second consultation draft of its Corporate Net-Zero Standard (November 2025) proposes that companies must set both location-based and market-based Scope 2 targets, with a phased pathway toward hourly matching of electricity attribute certificates - moving the standard materially beyond annual REGO matching. RE100 criteria recognise hourly, same-market matching as best practice and have tightened requirements on market boundaries and certificate transparency since 2024.

A business disclosing under these frameworks, or working toward them, needs a supply structure that can support the evidence, and a REGO-based tariff is almost certainly not enough.

Who is now checking

For most of the past decade, the scrutiny applied to corporate sustainability claims sat primarily with the business itself. Annual reports were reviewed, frameworks were signed, but the verification rigour applied to energy-related Scope 2 claims was, in most cases, limited - and that is no longer true.

The UK government’s mandatory climate-related financial disclosures, aligned to the TCFD framework and extended through ISSB adoption, require listed companies to demonstrate how climate-related risks and opportunities affect their strategy and financial position. Energy-related emissions are a material component of that picture.

Supply chains are conducting their own audits. For example, a manufacturing business being asked by a large automotive customer to provide Scope 3 data will find that its energy arrangement is no longer a private matter.

Investors with net zero portfolio commitments are increasingly capable of distinguishing between a tariff-level claim and a supply structure with genuine evidential weight.

According to the Department for Energy Security and Net Zero’s Digest of UK Energy Statistics (2025), renewables generated 50.4% of UK electricity in 2024 - the first time they have exceeded half of total generation. Yet the structures that allow businesses to access and evidence that renewable supply directly remain out of reach for most commercial buyers.

The standard of evidence that satisfied scrutiny in 2020 will not satisfy scrutiny in 2027. 

What closing the gap actually requires

The gap closes when the supply arrangement can answer the question the disclosure framework is asking.

For most I&C businesses, that means moving beyond annual REGO matching toward supply structures with stronger provenance: CPPAs with named generators, half-hourly matched supply, or arrangements that provide certificate-level traceability linking consumption to a specific generation source and period.

Some of those routes have historically required credit profiles or volume thresholds that excluded most commercial buyers. That constraint is not fixed. Consortium models - where aggregated demand creates the counterparty weight a single buyer cannot provide — have made direct renewable access available to businesses that would not qualify individually. Flexible supply frameworks, designed around a buyer’s specific load profile and risk appetite, can deliver the provenance a disclosure framework requires without the terms of a standard direct CPPA.

The practical question is not whether these routes exist, but whether the business knows them, and whether the advisory relationship it is working with has both the knowledge and the incentive to surface them.

This approach  requires a different kind of engagement — starting from the disclosure requirement and working back to the supply structure, rather than starting from the standard market offer.

The question your business energy supplier  should answer

When the next sustainability report is prepared, a supply chain customer requests Scope 2 evidence, or an investor asks how net zero commitments are being delivered, your energy arrangement should provide a clear and defensible audit trail showing the generation source, the certificate, and the link between what was consumed and what can be evidenced.

The question is no longer whether meaningful progress on decarbonisation is achievable, but whether  the route from ambition to evidence is supported by mechanisms that deliver measurable, auditable outcomes. Because when commitments are made, confidence comes from being able to demonstrate exactly how they are being delivered.