Zero Carbon Services, which works alongside the Zero Carbon Forum to help hospitality operators to reach net zero, is urging business to leverage climate action to reduce rising costs as the cut to business rates relief is predicted to cost the industry £500 million.
Trade association UKHospitality has forecast that the cut to business rates relief will cost the hospitality sector £500m.
Meanwhile, the cost of employing a full-time worker is forecast to increase by at least £2,500 per employee, costing £1.9 billion across the sector, due to rises in Employer National Insurance Contributions and the National Living Wage, according to the association.
To avoid customer price increases and maintain the sector average margin of five per cent, businesses would need to generate an additional £20,000 in revenue for every £1,000 taxed, which would be an unsustainable challenge for many operators.
Meanwhile, CGA’s recent data on climate change impacts showed that UK hospitality sales were 25.7% lower due to heavy rain and 8.2% lower due to extreme heat on like-for-like days between 2022 and 2023.
In light of the new budget and carbon commitments from the UK government, Zero Carbon Services is encouraging operators to unlock cost-cutting opportunities through climate action.
By reducing energy waste alone, Zero Carbon Services has helped seven operators save a combined £3.9m—an average of £3,600 per site.
Mark Chapman, CEO of Zero Carbon Services, said: “The budget and the impacts of climate change are increasing cost pressures on the sector. The work we’re doing with our clients to take credible climate action, from energy saving to ingredient switches and waste reduction, can mitigate the impacts by cutting carbon and costs.
“This proves that sustainability isn’t just good for the planet – it’s good for business.”
Over the last 12 months, Zero Carbon Forum has welcomed 21 new members, bringing the total membership to 74 and representing 35,000 sites.
Mr Chapman added: “These numbers show that the hospitality sector is stepping up to lead on climate action and the growing momentum highlights a clear shift in the industry. Sustainability is no longer just a moral imperative—it’s a business priority.
“Together, we’re proving that embedding carbon reduction measures not only addresses compliance but also drives cost savings and builds resilience.”
