In 2024, we outlined our view on the most important public-policy interventions to unlock private investment in the low-carbon economy. In this update, we take stock of policy developments since, and look ahead to 2026 and beyond.
In support of global and domestic efforts to tackle climate change, Aviva was the first major global insurer – and one of the first major financial institutions – to set a 2040 net-zero emissions ambition. It covers all parts of Aviva’s business and includes its investments, insurance underwriting, insurance claims supply chain, and its operations and supply chain.
As an insurer and long-term investor, Aviva recognises its role in helping customers and clients manage the challenges associated with climate change and capitalise on the opportunities of the transition to a low-carbon economy. Aviva also recognises that efforts to tackle climate change cannot focus solely on decarbonisation. Aviva therefore takes an integrated approach to delivering its sustainability ambitions, which also incorporate nature, climate adaptation, and social considerations.
Aviva’s progress towards its ambition was outlined in the second iteration of its Transition Plan, published in February 2025.1 By the end of 2024, 100 per cent of Aviva’s operational electricity came from renewable energy sources, it had invested £8.7 billion in sustainable assets since 2019 (beating its ambition of £6 billion), and the Scope 1 and Scope 2 carbon intensity by revenue of the listed equity and corporate bonds held in its shareholder and with-profit funds was 64 per cent below its 2019 levels (against an ambition of 25 per cent).
Tackling external dependencies to unlock low-carbon investment
Aviva is one part of a wider system responding to climate change, so cannot achieve its emissions reduction ambitions in isolation. A range of external dependencies will impact upon Aviva’s ability – and that of its financial sector peers – to achieve those goals. In particular, the Transition Plan noted that a supportive policy and regulatory environment is critical.2 The development of sufficiently ambitious, timely, clear, and long-term public-policy frameworks is essential to attract private-sector investment in low-carbon projects and businesses at the pace and scale required to meet national climate targets and at a reasonable cost of finance for businesses and society.
We recognise that private-investor insights are an essential input to inform effective policymaking. With this in mind, we published Aviva Investors’ first Low-Carbon Investment Policy Roadmap in July 2024.3 In it, we outlined key public-policy solutions to unlock greater private investment in low-carbon projects and businesses across eight broad sectors of the UK economy: power, energy-intensive industry, surface transport, buildings, aviation, shipping, nature restoration, and engineered greenhouse-gas removals.
Figure 1: A snapshot of our exposure to the low-carbon economy
Aviva has made a wide range of investments across the UK’s low-carbon economy, totalling £8.7 billion in sustainable assets between year-end 2019* and year-end 2024 (against an ambition of £6 billion).4
Specific examples of Aviva Investors’ and Aviva’s commercial exposure across different low-carbon sectors include:
Renewable energy
- Investment: Aviva Investors’ investments in renewable energy include a £400 million investment in one of the world’s largest offshore wind farms at Hornsea One that can power over one million homes (2018), financing towards the acquisition of offshore transmission assets at the Hornsea Two Offshore Wind Farm (2023), a €30 million equity investment in Innovo to support their renewable energy pipeline across Italy, the UK, and Spain (2025) and a €40 million investment into Connected Infrastructure Capital GmbH, a German-based renewable energy developer.5,6,7
- Insurance: In the UK, Aviva provides commercial insurance for the generation of on- and offshore wind, solar, and battery storage. We have grown our renewables portfolio over eighteen-fold between year-end 2019 and 2024.8
Real estate
- As of 2021, Aviva Investors had originated over £1.04 billon in climate-transition-focused real estate loans, surpassing its 2025 ambition of £1 billion of loans three years early.9
- As part of its Climate Transition Real Assets Strategy, Aviva Investors is developing Curtain House in Shoreditch into a best-in-class office space, targeting an upgrade of its Energy Performance Certificate rating from E to A, such as by replacing the gas heating system with electric heat pumps.10
- Aviva and Aviva Investors worked together to complete a transaction for a new Velindre Cancer Centre in 2024, which provides specialist cancer services to over 1.7 million people. The scheme will target a BREEAM “Excellent” rating and is designed to use all-electric solutions and air-source heat pump infrastructure, supporting low energy demand and low operational carbon.11
- Aviva Ventures also invested in Rendesco alongside the Clean Growth Fund and Eurazeo’s Smart City Fund.12 Rendesco is a UK market leader in ground-source heat pump solutions, particularly within the new-build housing sector.
EV-charging infrastructure
- Aviva Investors has committed to a number of investments in the UK and Ireland’s EV charging infrastructure, including up to £110 million in 2022 and a £10 million ordinary equity investment in 2025 (alongside £55 million from the National Wealth Fund) in Connected Kerb to grow its charging network in the UK and €30 million in Erapid (now trading as EZO) to develop further sites across its growing EV-charger network in Ireland.13,14,15
- Aviva Ventures supported a funding round led by National Grid Partners for ev.energy, an EV managed-charging software platform, to support an expansion of its global operations in electric vehicle-to-grid services in North America and Europe.16
Zero-emission buses
- Aviva Capital Partners partnered with Rock Rail and the National Wealth Fund (then the UK Infrastructure Bank) to provide a new funding platform (‘Rock Road’) for zero-emission buses in 2024. The partnership, alongside a debt facility from the UK Infrastructure Bank and HSBC UK, committed an initial £100 million to fund up to 250 zero emission buses and associated infrastructure.17
Nature restoration
- By year-end 2024, Aviva had committed £87 million to nature-based solutions in the UK, Ireland, and Canada, which deliver carbon sequestration, biodiversity gain, improved climate resilience, and social and community benefits.18
- Aviva Investors has made two investments in Scotland – Glen Dye Moor in Aberdeenshire, where five million trees will be planted and 1,800 hectares of peatland will be restored, and Glen Forsa, where 1,500 hectares will be afforested – which should contribute a cumulative 350,000 tonnes of carbon removal by 2040.19
- Aviva Investors launched the Carbon Removal Fund in September 2024. The fund aims to grow to £1 billion over the next ten years with a dual scope across both nature-based and engineered solutions.20
- Aviva Ventures contributed to one of the largest early-stage funding rounds in the nature restoration sector, raising £40 million of equity overall for Nattergal. This funding enabled the acquisition of three sites, in which nature restoration work has already begun.21
Note: *Defined as green and sustainability assets, sustainability-linked debt, social bonds and investment of £1.5 billion of policyholder money in Aviva Investors climate transition funds (available at the time).
Source: Aviva Investors, September 2025.
Global investment in low-carbon technologies continues to accelerate
Meanwhile, global momentum behind low-carbon investment has continued to build. A record $2.1 trillion was invested globally in clean-energy technologies in 2024, an 11 per cent increase on the previous year. Ninety per cent of this came from investment in renewables ($728 billion), electrified transport ($757 billion) and power grids ($390 billion).22
In the power sector, against a backdrop of marked growth in global electricity demand in 2024 (of more than twice the annual average of the last decade), 80 per cent of the growth in electricity generation was provided by renewables and nuclear. Renewables supplied 32 per cent of total global generation and nuclear a further eight per cent.23 Despite reduced projections for renewables deployment in some countries, the International Energy Agency (IEA) forecasts that installed global renewable power capacity will double between 2025 and 2030, increasing by 4,600GW. The IEA notes this is roughly the equivalent of adding China, the European Union and Japan’s power generation capacity combined to the global energy mix.24
In the transport sector, for the first time, in 2024, electric vehicles represented over 20 per cent of new car sales globally (and almost half of all new car sales in China). The IEA forecasts that new EV sales could amount to more than 25 per cent of global new car sales in 2025.25
In the nature restoration sector, the UN Environment Programme Finance Initiative (UNEP FI) reported that private finance for nature increased elevenfold, from $9.4 billion in 2020 to $102 billion in 2024.26
As outlined in Aviva Investors’ Q3 2025 House View and Q4 2025 House View, we are seeing continued momentum behind both infrastructure debt and equity investments.27,28 These investments can deliver a range of broader benefits, including economic growth, energy transition, energy security, and digital transformation. It is especially the case for renewable energy infrastructure, which continues to dominate infrastructure equity capital flows, with strong investment volumes observed in H1 2025, particularly in Europe. The energy storage sector – particularly batteries – is also rapidly emerging as an indispensable cornerstone of the energy transition. Policies and trends around energy security, decarbonisation targets, and electrification – and the continued funding gap for the UK and Europe’s energy transitions – are helping to drive this upward investment trajectory.
The growth of the UK’s low-carbon economy
In the UK, the low-carbon economy also continues to gain importance. Analysis from the Confederation of British Industry (CBI) suggests that low-carbon supply chains contributed £83.1 billion in gross value added to the UK economy in 2024 (a 10.1 per cent growth on 2023), employing 951,000 people across the country, and with typically more productive and higher-paid full-time roles than the UK average.29
Looking ahead, the UK’s Climate Change Committee (CCC) estimates that an average of £26 billion of annual additional investment will be needed between 2025 and 2050 to put the UK on a cost-effective pathway to meeting its emissions reduction targets. Most of this will be needed over the next ten to fifteen years to decarbonise key sectors such as power, surface transport and domestic heating.30
And a significant share of this investment will need to come from the private sector. For that to happen, private investors need to identify investment opportunities in low-carbon projects and businesses that will deliver an appropriate level of risk-adjusted returns, at a reasonable cost of finance for governments, businesses and society. Clear, ambitious, and long-term public-policy frameworks have a key role to play in growing a sufficiently large pipeline of commercially viable projects.
Taking stock of recent policy developments and looking ahead
Four key themes to unlock greater investment in the UK’s low-carbon economy
Over the last 12 months, the UK government has unveiled a range of strategies – such as the Clean Power Action Plan and Modern Industrial Strategy – and announced a range of policies to improve market conditions for low-carbon investment, all of which have been brought together under the umbrella of the revised Carbon Budget and Growth Delivery Plan. This includes announcements aimed at spurring investment in sectors as varied as clean power, zero-emissions vehicles, heat pumps and energy-intensive industries (see themes below). The priority must now be to implement these policies and strategies at pace to unlock private investment in low-carbon projects and businesses.31
The UK government has unveiled a range of strategies and announced a range of policies to improve market conditions for low-carbon investment
The aim of the Boosting low-carbon investment in the UK - 2025 Roadmap Update (“2025 Roadmap Update”) is to take stock of these policy developments, reflect on their potential implications for private investors, and identify key next steps to facilitate further private investment in low-carbon technologies, projects and businesses across the UK.
The 2024 Roadmap identified four key public-policy themes that were essential to drive private-sector investment in the UK’s low-carbon economy. The 2025 Roadmap Update provides a more succinct overview of recent developments and forward-looking recommendations across those four themes. Under each theme, we focus on a limited number of relevant sectoral examples that have recently seen significant public-policy developments, or where important interventions are required in the near term. A summary of these is set out below.
Theme 1: Tackling cross-sectoral barriers is crucial to unlocking investment
Several systemic barriers are holding back private investment in the UK’s low-carbon economy, including planning delays, volatile carbon pricing and skill gaps. A lack of long-term clarity on climate adaptation policy could also become a challenge for investment where new and existing infrastructure projects are at greater risk of exposure from extreme weather events.
We stress the importance of an implementation plan in the near future to link the UK and EU emissions trading schemes
Over the last 12 months, a range of policy actions have begun to address these issues, including through the revision of the National Planning Policy Framework, the introduction of a Planning and Infrastructure Bill and other measures to accelerate planning consent for Nationally Significant Infrastructure projects, including low-carbon projects such as clean-power infrastructure, carbon capture and storage (CCS) and hydrogen production.32,33 This is in addition to power-sector-specific planning and connection reforms covered under Theme 2. Other key policy developments include the creation of Skills England to address skill gaps across low-carbon supply chains, the publication of the Clean Energy Jobs Plan with specific actions to support the growth of the clean-energy workforce, and a commitment to link the UK and EU Emissions Trading Schemes (UK ETS and EU ETS) to improve market liquidity.34,35
In this theme, we highlight some key next steps. These include finalising measures to reduce planning delays for Nationally Significant Infrastructure projects, for example through a more streamlined consenting process (alongside power-sector-specific planning and connection reform recommendations set out in Theme 2). We stress the importance of an implementation plan in the near future to link the UK and EU ETSs, as this could help deliver a larger and more liquid carbon market, and a potentially more stable carbon price for investors. It could also avoid the costs that could come from UK businesses being subject to the EU carbon border adjustment mechanism (CBAM).
We call for continued progress in developing a cross-sectoral skills plan through Skills England and a rapid implementation of the measures in the Clean Energy Jobs Plan to tackle skill gaps, provide specific skills support to workers in high-carbon sectors facing a decline in activity, and deliver a Just Transition on the ground. We also highlight the case for developing a stronger fourth National Adaptation Plan (NAP4) to make new and existing infrastructure more resilient to extreme weather events and improve the investment case in UK infrastructure.
Theme 2: Delivering growing volumes of affordable low-carbon electricity will enable low-carbon investment across other sectors
The growth of the UK’s clean-power generation and grid network infrastructure is a significant investment opportunity in its own right: the National Electricity System Operator (NESO) estimates an average annual investment of over £40 billion per year will be required for the rest of the decade to decarbonise the power grid.36 The predictable availability of affordable clean-electricity supplies is also essential to support investment in low-carbon infrastructure in other sectors. Surface transport (i.e. cars, vans and buses), domestic heating, and some industrial processes will increasingly need to run on electricity. The CCC estimates annual electricity demand could double between 2023 and 2050.37
Rapidly progress reforms to make the new regime more effective at directing infrastructure investment in the most strategic locations
Under the umbrella of its Clean Power Action Plan, the government has pursued a range of measures to improve the investment context for clean power and network infrastructure.38 Building on reforms that had started under the previous government, the measures include planning reforms to facilitate and speed up approvals for new networks, clean-power generation, and storage infrastructure, as well as grid connection reforms to cut the time it takes to connect new low-carbon power and storage projects to the grid.39,40 Other key interventions are seeking to improve the commercial viability of new projects supported by the UK’s annual renewable energy auction process. These include extending the duration of Contract for Differences (CfDs) from 15 to 20 years, increasing ceiling strike prices for some technologies, and allowing flexibility in determining the final annual auction budget where it is deemed to represent value for money for consumers.41,42,43
The government also reached a final decision on the Review of Electricity Market Arrangements (REMA), opting for a Reformed National Pricing (RNP) regime.44 The stated objective of this new regime is to ensure new low-carbon energy generation and storage projects are built in locations that are most strategic and cost-effective for the overall network, thereby tackling existing constraints (and associated costs) on parts of the network. However, the government and a range of public bodies will need to work together to rapidly progress reforms to make this new regime more effective at directing infrastructure investment in the most strategic locations. Key next steps include the development of a Strategic Spatial Energy Plan and Centralised Strategic Network Plan, and a review of seabed leasing and transmission network use of system charging arrangements.
Looking ahead, investors will be looking for policymakers to rapidly develop and finalise ongoing planning, connections and electricity market reforms as part of the new RNP regime. Policymakers will also need to implement recently completed policy reforms at pace – and monitor their effectiveness. For example, they will need to operationalise the reforms to the annual renewable-energy auction rounds (ARs), strike prices, and contract terms for CfDs. They should ensure these reforms are effective at growing the pipeline of commercially viable renewable-energy projects in forthcoming annual auctions (from AR7 onwards) and delivering value for money for consumers. Progress to finalise the RIIO-3 price control frameworks will also be essential to unlock investment at scale in electricity transmission and distribution networks. This is important in anticipation of the high volumes of new low-carbon generation, storage, and electricity infrastructure expected to connect to the grid in the coming years.
Finally, progressing negotiations for the UK to rejoin the EU’s internal electricity market would help unlock electricity trading across interconnectors, which could cut wholesale electricity costs for the benefit of both industrial and residential consumers. This would improve the investment case for electrification across different sectors. Implementing and developing further measures to reduce the price of electricity for residential consumers could also be considered, in line with the announcements set out in 2025 Budget. In addition to providing relief with high electricity bills, such measures would help cut the operational costs to residential consumers of running low-carbon appliances such as heat pumps and electric vehicles, improving their relative attractiveness and supporting investment in their supply chains.
Theme 3: Investors need a balance of supply-side and demand-side levers to invest in commercially viable low-carbon supply chains
Historically, with the exception of the power sector, low-carbon policy has tended to primarily focus on the supply side, by supporting the initial development and commercialisation of new technologies. Fewer policies have focused on stimulating market demand for low-carbon goods and services. However, as explained in our 2024 Roadmap, having a balance of supply- and demand-side measures is essential to support the development of commercially viable – and investable – supply chains across different low-carbon sectors.
We encourage the development of demand-side policy signals to grow demand for low-carbon industrial products
In Theme 3, we consider policy developments and next steps for four sectors: surface transport (in particular electric cars and charging infrastructure), residential buildings (energy efficiency and low-carbon heat measures), energy-intensive industries (electrification, CCS and hydrogen in sectors such as steel, chemicals, and cement) and nature restoration (such as woodland, wetland, and peatland restoration).
Over the last year, there has been a notable focus on addressing this policy imbalance, with a range of supply- and demand-side measures either implemented – or being consulted on – to support the growth of supply chains for electric vehicles, heat pumps and low-carbon industries. A good example comes from energy-intensive industries. On the supply side, the government introduced policy to support the deployment of (still relatively new) low-carbon technologies: this has included the finalisation of CCS business models, funding for CCS and low-carbon hydrogen infrastructure in industrial clusters, holding further auctions for green hydrogen production projects, and announcing measures to reduce electricity prices for energy-intensive industries from 2026/27.45,46,47 These supply-side policies have been accompanied by a consultation on possible measures to grow demand for low-carbon industrial goods in the steel, cement, and concrete sectors (for example, through green public procurement criteria and product standards).48
We suggest the focus for policymakers should now be to maintain a balance of supply-side and demand-side policy levers in sectors where there have been advanced policy developments, and to monitor their effectiveness. This is particularly the case for electric cars (with the revised Zero Emissions Vehicles Mandate and new Electric Car Grant Scheme) and heat pumps (with the Clean Heat Market Mechanism and Boiler Upgrade Scheme).
In other sectors such as energy-intensive industries and nature restoration, the focus should be to push ahead in developing a more balanced policy framework on the supply and demand sides. Alongside finalising funding plans and business models to improve the competitiveness and predictability of industrial electricity prices to support electrification, we encourage the development of demand-side policy signals to grow demand for low-carbon industrial products. This could be through carefully designed low-carbon procurement criteria and product standards covering finished goods (e.g., buildings, vehicles) and intermediate goods (steel, cement, chemicals, glass etc.). For high-integrity nature restoration projects, we highlight the importance of developing new nature restoration compliance markets and the role of robust carbon price signals to improve the level and predictability of their revenue streams.
Theme 4: Deploy earmarked public investment to efficiently crowd in private investment in priority sectors
In a challenging context for the UK’s public finances, only limited public investment can be made available to support the growth of the low-carbon economy. It should therefore be directed to sectors where market barriers subsist and where public investment can help de-risk projects or supply-chain investment, with a view to crowding in private investment.
In our 2024 Roadmap, we highlighted three categories of opportunities for public investment to focus on:
The next step should be about timely implementation in a way that most effectively crowds in private investment
- First-of-a-kind projects involving emerging-technology risk (e.g., new low-carbon industrial plants in energy-intensive sectors);
- Logistically complex projects (e.g., the mass retrofit of homes and buildings with energy efficiency and low-carbon heat measures); and
- Critical infrastructure that is either essential to the decarbonisation of multiple sectors (e.g., hydrogen pipelines in multi-sector industrial clusters) or essential to the growth of low-carbon supply chains (e.g., the modernisation of port infrastructure to support supply chains as varied as floating offshore wind, hydrogen, low-carbon shipping fuels, etc.).
Over the last year and through its multi-annual Spending Review in June 2025, the government has made important public funding and investment announcements at the sector-specific level. It has also created or strengthened public investment institutions, giving them a remit to provide greater support to low-carbon projects and supply chains. It formally established the National Wealth Fund (NWF) – previously the UK Infrastructure Bank – with a capitalisation of £27.8 billion, £5.3 billion of which is to be deployed specifically towards five priority low-carbon sectors (green steel, green hydrogen, CCS, gigafactories, ports).49 It has also set up a new public energy company, GB Energy, with a capitalisation of £8.6 billion to facilitate investment in and the development of complex clean-energy projects and supply chains.50 And it has increased the British Business Bank’s financial capacity to £25.6 billion.51 The latter aims to drive investment in the priority sectors earmarked under the government’s new Industrial Strategy, including clean energy and advanced manufacturing.
These are significant sums. The next step should now be about timely implementation, with a focus on delivering existing commitments rapidly and in a way that most effectively crowds in private investment. In Theme 4, we outline a range of possible steps to build on recent progress. This includes:
- Further clarifying the respective remits of – and interaction between – the different public investment institutions;
- Operationalising their mandates and their blended finance tools in a way that optimises public and private co-investment. This includes further developing approaches to enable these institutions – and in particular the NWF – to support higher-risk projects unlikely to be backed by private investors alone. It also includes developing bespoke public-investment pathways for priority low-carbon sectors, as is being done for the offshore wind supply chain; and
- Efficiently deploying committed public investment towards projects, supply chains, and sectors where it can most effectively crowd in private investment. We provide specific examples in Theme 4.
To maximise the impact of public investment, we also highlight that public-investment priorities must work hand in hand with the development of a broader and supportive public-policy framework that seeks to attract long-term private investment in low-carbon projects and businesses across different sectors of the economy.
Recommendations in a timeline
The 2025 Roadmap Update’s recommendations in a timeline:
Figure 2: Theme 1 – overcoming cross-cutting barriers
Source: Aviva Investors, October 2025.
Figure 3: Theme 2 – affordable low-carbon electricity
Source: Aviva Investors, October 2025.
Figure 4: Theme 3 – balance of supply-side and demandside levers
Source: Aviva Investors, October 2025.
Figure 5: Theme 4 – public investment
Source: Aviva Investors, October 2025.
Download the report
Download “Boosting low-carbon investment in the UK: 2025 Roadmap Update” to understand:
- The four key policy areas that can help bolster low-carbon investment in the UK
- The past year’s policy developments with the potential to make a difference
- Essential next steps to bring it all together
2025 Roadmap Update
The report reflects our clients’ continued appetite for investment opportunities in low-carbon projects and businesses that deliver an appropriate level of risk-adjusted returns.
