Businesses that form a part of the net zero ecosystem contribute £60bn a year to the economy and support 766,000 jobs

New research by Leeds-based data consultancy The Data City with CBI Economics has mapped the impact and activity of 16 key sectors which play a role within the whole UK net-zero economy.

By developing new Real-Time Industrial Classifications (RTICs), a snapshot of 16,000 companies was identified within these 16 sectors.

The consultancy also developed unique scorecards which evaluate the transition of 374 local authority areas in eight metrics around energy, economy and emissions.

The Data City and CBI Economics believe this analysis can better inform UK climate action goals by offering an improved level of insight not given by the current Standard Industrial Classification (SIC) system, which has not been updated since 2007.

Rain Newton-Smith, chief economist at CBI, said: “The UK’s transition to net zero greenhouse gas emissions will be the defining change over the next decade.

“In addition to protecting the planet we share, net zero presents opportunities for businesses across the country to innovate and grow. To make the right investments and actions, we need a better understanding of the net zero ecosystem, and the work we have undertaken with The Data City is a step forward in helping the UK better place itself to deliver our transition to a net zero economy.”

The data shows that regions that seize the growth opportunities of the net zero transition are more likely to see a rise in prosperity.

It is reflected through the report’s wage analysis which demonstrates a wage premium for these jobs compared to many other sectors.

The report also highlighted the importance of the transition to net zero for the Levelling Up agenda.It found that net zero economic activity is more regionally distributed compared to the historic concentrations around London seen in other sectors.

Alex Craven, CEO of The Data City, said: “The road to net zero is dependent on the rapid growth of the industrial sectors that allow us to transition our carbon consumption and production habits to carbon neutral alternatives.

“However, the Standard Industrial Classification system for these sectors does not take into account new and growing industries.

“Using our Real-Time industrial Classifications, we have managed to identify 16 industry sectors within the wider net zero ecosystem capturing almost 16,000 companies. This level of detail will give our policymakers improved data to ensure the sector can be better supported to lead us all on the road to net zero.”

Changing classification system

Alex Craven co-founded The Data City in Leeds after realising that there was no source of data for finding companies outside of outdated Standard Industrial Classification (SIC) codes. The Data City instead has come up with its own system that also incorporates SIC codes.

The current system is likely missing out large parts of the economy, Mr Craven believes.

The Leeds-based business has created 258 new classifications, which also cover emerging economy sectors. It uses artificial intelligence to classify businesses according to the text on their website.