Government policy on climate change is so vague and inconsistent businesses are unable to make sensible investment decisions on environmental issues, says a survey of large and medium-sized companies.

More than half the 151 companies in the survey said they needed more certainty on what would be required of them when making long-term decisions to reduce their carbon footprints, for example over new buildings.

A large majority said the best way to reduce carbon emissions would be through more regulation, followed by taxes and tax breaks to encourage better environmental practices.

Fewer than half thought voluntary agreements and market trading schemes were effective environmental tools.

“It might seem surprising that businesses appeared to welcome further regulation,” said Glyn Barker, a managing partner of PwC, the professional services firm that commissioned the survey.“ But corporate leaders recognise that customer and investor pressure is not enough to change their behaviour fast enough given the urgency and scale of action required.”

Just more than seven out of 10 companies said climate change and environmental issues were affecting corporate behaviour. Just under a third said there would be a lot of changes in the way they did business over the next two or three years.

The main influence on corporate environmental behaviour was government regulation. Other influences included customer demands, cost savings, keeping up with competitors and, to a lesser extent, attracting and retaining staff.

There was concern about the plethora of tax and regulatory initiatives on environmental issues and the government’s constant policy changes. There was also criticism over the lack of coordination between Whitehall departments, between central and local government and between London and Brussels.

“The government needs to be more joined up,” said one company. “Business has to talk to Treasury, Defra, DTI separately – they need to talk to each other.”

Most of the companies said they would welcome tax incentives to encourage them to become carbon neutral. Construction companies showed the greatest interest in going carbon neutral, while manufacturers were most sceptical about the idea.

With green taxes, the business preference was for those with clear environmental goals designed specifically for the task, such as landfill tax, aggregates levy and the climate change levy.

Michael Roberts, director of business environment with the CBI employers’ group, said the survey showed the importance of achieving the right combination of carrot and stick when it came to using taxation and regulation to influence companies.