Japanese companies are the least confident among Group of Seven (G7) economies about achieving net-zero emissions, according to the British Standards Institution (BSI), as discrepancy grows between what businesses are saying and doing when it comes to decarbonisation.
The findings, based on a February survey of 7,068 business leaders conducted by Censuswide, highlight a widening gap between corporate ambition and execution amid political uncertainty, rising costs and capability constraints.
Across the G7, 83 per cent of companies said they remain committed to meeting national net-zero targets, with most firms continuing to increase or maintain climate-related action rather than scaling back.
However, only 55 per cent of business leaders overall expressed confidence that their countries would achieve those targets, reflecting growing concern over the pace of progress.
Japan stood out as the most cautious market in the group.
Only 69 per cent of Japanese respondents said they are committed to reaching net zero by their national target date, well below the G7 average of 83 per cent, while just 43 per cent said they are confident their business will meet the goal — the lowest level among all G7 economies.
Japanese firms also lagged peers in their understanding and planning for the transition to lower emissions.
About 54 per cent said they understand the actions required to achieve net zero and have a clear pathway to do so, compared with a G7 average of around two-thirds. Confidence at the sector level was even weaker, with only 40 per cent expecting their industry to meet net-zero targets.
The report suggests that this caution reflects structural challenges rather than a lack of intent, .
Policy uncertainty remains a major constraint, with around three-quarters of G7 business leaders saying unclear or shifting policies make it difficult to invest with confidence. In Japan, this dynamic is compounded by relatively lower trust in emissions data and persistent shortages of skills and expertise needed to implement decarbonisation strategies.
At the same time, Japanese companies appear to be moving more slowly from commitment to action. Only 59 per cent reported increasing their level of net zero action over the past 12 months, compared with a G7 average of 69 per cent, while a higher share said activity had remained unchanged.
Despite these constraints, Japanese business leaders broadly recognise the economic and strategic importance of the transition.
Across the G7, 74 per cent of respondents said the risks of not moving to net zero outweigh the risks of transition, and 75 per cent said decarbonisation would open new markets and innovation opportunities.
In Japan, a majority also view net zero as essential for long-term resilience, particularly as companies face rising energy costs and increasing supply chain disruption linked to climate change and geopolitical tensions.
The report highlights a broader shift in how businesses frame climate action. Rather than emphasising environmental benefits alone, companies are increasingly linking net-zero strategies to resilience, risk management and competitiveness — a trend BSI described as “climate-coding”.
More than 60 per cent of G7 firms said they have changed how they communicate sustainability efforts over the past year in response to political and media scepticism, often focusing on business value rather than environmental messaging.
Even so, implementation remains uneven. Only one in five companies across the G7 have undertaken formal climate adaptation planning, and just 21 per cent have invested in renewable energy procurement, underscoring a gap between strategic intent and practical execution.
Cost pressures also continue to weigh on progress. About 26 per cent of respondents cited the cost of decarbonisation as the biggest barrier, alongside limited access to finance, skills shortages and a lack of regulatory clarity.
“Uncertainty and disruption are increasingly defining the global economy,” BSI said, adding that businesses are seeking clearer standards and guidance to translate climate ambition into action.
The organisation is developing what it describes as the world’s first international net zero standard, expected to be finalised in 2027 and aimed at providing a consistent framework for corporate transition planning.
