From pledges to pivots: Labour's year of climate retrenchment

Co-authored by By Imogen O'Rorke and Tim Le Couilliard

Almost a year since taking power, Labour now finds itself between a rock and a hard place on several of its environmental and social pledges. Let’s not forget that the current government came into office with a strong election promise to invest £24 billion in green initiatives; and at COP29 in Azerbaijan, newly elected Prime Minister Sir Keir Starmer made a bold commitment to cut UK emissions by 81% by 2035.

But 2025 has transformed the political scene almost beyond recognition. First, the Trump administration announced the cancellation of all ESG-related policies — most notably, the immediate withdrawal from the Paris Agreement. Then came the US Tariff Wars — two tectonic shifts that have sent shockwaves across the globe, reshaping policy and business strategies everywhere. In Europe and beyond, the discourse has been dominated by conflicts on the continent’s eastern borders, pushing environmental and climate concerns down the list of perceived risks to  prosperity.

Closer to home, and with re-election already on Labour’s radar, the government has alarmed environmental campaigners, progressives, and many of its traditional supporters by backtracking on several ESG issues such as loosening NPPF Green Belt policies and regulations to allow small-scale housebuilding on designated green belt land. Some critics have gone as far as accusing the government of betraying the social contract in recent weeks — citing cuts to disability benefits, slashing international aid and leaving trans people in legal limbo —  all of which have proven deeply unpopular with Labour’s progressive base.

With murmurs that the UK might follow France and Germany in calling on the EU to relax supply chain auditing in response to Trump-era tariffs, further rollbacks under the banner of “defending UK business interests” and boosting international competitiveness seem increasingly likely.

Labour, which built its election campaign around the central promise of “growth,” knows all to well that it will be judged by the public on tangible economic improvements that ease the cost-of-living squeeze. While growth isn’t something a government can control directly, it does have several levers at its disposal to stimulate the economy. But at what cost? The Planning and Infrastructure Bill and recent developments in the Biodiversity Net Gain (BNG) market — highlighted by last week’s consultation launch — suggest a government prioritising growth above all else, even at the expense of previously core principles. And it’s not just in planning and the built environment. Other examples include new “wiggle room” for hybrid vehicles, with new sales now permitted until 2035 under the ZEV mandate.

One year on, Labour appears increasingly isolated in its policy choices, as swathes of traditional red voters defect to the right (Faragism), the left (Corbynites/Greens), or the alternative middle. Last week, polling company Thinks Insight & Strategy found that 52% of Labour voters from the 2024 general election are now considering switching to the Lib Dems or the Greens. Labour will be acutely aware of this and appears poised to pivot its strategies accordingly.