Sustainability regulation is in flux. From delays in the EU’s Corporate Sustainability Reporting Directive (CSRD) to climate disclosure rollbacks in the US, the global landscape is uncertain. But UK mid-market businesses aren’t waiting for clarity. 

Grant Thornton’s 2025 International Business Report (IBR) reveals that despite regulatory delays, 92.4% of UK mid-market firms intend to maintain or increase their investment in sustainability.  That’s ahead of the global average (86%) and the EU (80.4%), demonstrating the UK mid-market’s leading role in driving the sustainability agenda forward. 

92.4%
will maintain or
increase sustainability investment
78.7%
will continue
reporting despite regulatory rollbacks
65.2%
plan to invest
in renewable energy*

UK leads on sustainability investment

testimonial client avatar
At the start of this year, regulatory and political uncertainty placed some doubt over the direction, extent and timing, of sustainability reporting. I heard a lot of talk about a ’no regrets approach’ to sustainability reporting, recognising the challenge, but also the opportunity.
Paul Holland Head of ESG and Sustainability Services

UK mid-market firms are outpacing their global peers in both ambition and action:

68.5%
plan to increase
sustainability investment — compared to 56.5% globally and 48.7% in the EU
64.2%
believe
sustainability will help improve supply chain operations (v 53.8% globally)*
62.8%
say it will help
attract investors (v 49.8% globally)*

Many also see a direct link between sustainability and commercial performance:

  • 57.4% connect it to revenue growth
  • 62.4% to long-term profitability
  • 41.5% to short-term profitability
  • 48.2% to cost reduction

*of those that are planning to increase or maintain their investment in sustainable initiatives

Global context: a shared shift in mindset

Across the 35 economies surveyed, the IBR shows a clear trend: sustainability is increasingly seen as a driver of growth, not just a regulatory requirement.

Key global findings:

  • 85.9% intend to maintain or increase sustainability investment
  • 72.9% will continue sustainability reporting despite regulatory rollbacks
  • Firms see sustainability as a driver of growth, not just compliance
  • Commercial drivers—like brand reputation, market competition, and access to finance—are outweighing regulatory pressures

Where’s the investment going?

For those maintaining or increasing investment, the area of focus remains diverse, but renewable energy continues to be the top priority, both globally (43.5%) and for the UK (65.2%). In the UK, carbon reduction and waste management and reduction complete the top three, while globally it’s the development of new, sustainable products and diversity and inclusion that take the second and third place spots, although both these areas still rank highly for UK firms. 

UK firms are prioritising operational impact — focusing on emissions, waste, and energy while still aligning with global trends in innovation and inclusion.

Sustainability reporting: embedded and resilient

Despite changes to the Corporate Sustainability Reporting Directive (CSRD) and the rollback of climate disclosure rules in the US, UK firms remain committed to sustainability reporting.

  • 78.7% of UK firms will continue reporting—driven by business value, purpose alignment, and process maturity
  • 31.8% say reporting makes good business sense
  • 35.1% say it aligns with their purpose
  • 11.8% say they will continue because they had nearly completed the underlying process before some of the delays were announced
testimonial client avatar
It’s encouraging to see in the findings what I hear from my clients already: that firms remain committed to sustainability reporting, and for good reasons. They’re building capability not just to meet regulatory requirements, but to support long-term success. We're also seeing an increase in the demand for sustainability assurance, a sign that trust and transparency are top of mind.
Paul Holland Head of ESG and Sustainability Services

UK outlook: committed, but cautious

When asked about their outlook in response to political headwinds in some regions and regulatory changes:

55.1%
of UK firms say
they remain committed to sustainability and won’t alter their plans
29.8%
are relieved
by the regulatory reset
33.4%
say the new
direction being taken by politicians and regulators aligns better with their business needs

There are of course firms which have felt the disruption: 20.3% of UK firms (with similar levels globally and for the EU) say they’re undecided on their sustainability outlook and are continuing to monitor the situation, with 13.8% feeling confused and unsure of their next steps. 11.1% are disappointed with the increased political opposition and proposed changes in regulations. However, around a fifth say the political and regulatory changes aren’t expected to have a significant impact on their business.

Barriers to progress: cost and complexity of regulations

The biggest challenges to scaling sustainability are consistent across the UK, EU, and global markets:

  • Cost — the top barrier for most firms
  • Complexity of regulations and standards
  • Volume of requirements
  • Political uncertainty

These challenges are real — but not insurmountable. Many firms are already finding ways to adapt, collaborate, and innovate.

What next for UK sustainability leaders?

Based on the findings, here are five areas to focus on to support growth:

Integrate sustainability into core business planning. Use sustainability to drive efficiency, attract customers, and differentiate in competitive markets.

Upskill teams across finance, operations, and procurement. Build confidence in sustainability leadership and data management.

 

Take advantage of regulatory resets to tailor reporting to your business. Focus on materiality and stakeholder relevance. Consider the integrity of your systems, processes and data and prepare for and obtain assurance to enhance external quality, credibility and trust.

 

Engage investors, suppliers, and industry peers to share costs and co-develop solutions. Explore green finance and incentives.

Position sustainability as a business enabler. Focus communications on resilience, longevity, and value—not politics.

Scaling sustainability

Scaling sustainability

How the mid-market is future-proofing growth

    About the Global Report

    The IBR Sustainability Report 2025 explores how mid-market firms across 35 economies are responding to shifting sustainability expectations. Conducted between April and June 2025, the research captures the views of over 15,000 business leaders.