International investors continue to rate the UK highly as a destination for sustainability-related investment despite a sharp decline in the number of foreign-backed energy projects, according to research from EY.

More than 80 per cent of 360 international investment decision-makers surveyed for EY's 2026 UK Attractiveness Survey rated Britain as either better than or on a par with competing countries across every sustainability measure assessed.

The findings contrast with a significant decline in actual energy investment. The UK secured 27 foreign direct investment projects across energy-related industries in 2025, down 51 per cent from 55 the previous year.

Despite the fall, Britain remained Europe's second-largest destination for energy FDI projects, behind France. The figures cover investment in oil and gas as well as electricity supply, including renewable energy, transmission and storage.

Investor perceptions of Britain's renewable energy and cleantech capabilities nevertheless remained relatively strong. Some 60 per cent rated the UK's provision of renewable electricity positively, while 53 per cent said its ecosystem of innovative cleantech and sustainability businesses was better than those of international competitors.

The survey also found 42 per cent of investors believed the UK outperformed rival destinations in its regulatory support for sustainable businesses, access to finance for sustainability projects and availability of relevant skills.

However, the decline in energy projects highlights the competition Britain faces for international capital as governments seek to attract investment into power generation, grids and clean technologies.

More than a third of investors, 36 per cent, said supporting strategic industries including cleantech and artificial intelligence should be a priority if the UK is to maintain its position in the global economy.

Rob Doepel, EY's UK managing partner for sustainability, said Britain possessed "many of the credentials and skills that investors are looking for when allocating long-term capital".

"It is particularly encouraging that investors continue to see the UK as home to a leading ecosystem of innovative cleantech and sustainability businesses," he said.

Doepel added that a stable policy environment would be important to maintaining investment as the energy transition gathered pace.

"Continued progress, supported by a stable and supportive policy environment, will be essential to helping sustainability-focused businesses grow, strengthening UK competitiveness and driving long-term economic growth," he said.