diff --git a/test/e2e/suites/e2e/clusterctl_upgrade_test.go b/test/e2e/suites/e2e/clusterctl_upgrade_test.go
index 8d4e5fc0a3..5a2fcc8c80 100644
--- a/test/e2e/suites/e2e/clusterctl_upgrade_test.go
+++ b/test/e2e/suites/e2e/clusterctl_upgrade_test.go
@@ -21,6 +21,7 @@ package e2e
 
 import (
 	"context"
+	"os"
 
 	. "github.com/onsi/ginkgo/v2"
 	capi_e2e "sigs.k8s.io/cluster-api/test/e2e"
@@ -34,23 +35,26 @@ import (
 // When new minor releases are added (with the same contract) we will need to work on this
 // if we want to continue testing v0.6.
 var _ = Describe("When testing clusterctl upgrades (v0.6=>current) [clusterctl-upgrade]", func() {
-	It("should succeed", func() {
-		ctx := context.TODO()
-		shared.SetEnvVar("USE_CI_ARTIFACTS", "true", false)
-		shared.SetEnvVar("DOWNLOAD_E2E_IMAGE", "true", false)
-
-		capi_e2e.ClusterctlUpgradeSpec(ctx, func() capi_e2e.ClusterctlUpgradeSpecInput {
-			return capi_e2e.ClusterctlUpgradeSpecInput{
-				E2EConfig:                 e2eCtx.E2EConfig,
-				ClusterctlConfigPath:      e2eCtx.Environment.ClusterctlConfigPath,
-				BootstrapClusterProxy:     e2eCtx.Environment.BootstrapClusterProxy,
-				ArtifactFolder:            e2eCtx.Settings.ArtifactFolder,
-				SkipCleanup:               false,
-				InitWithBinary:            "https://github.com/kubernetes-sigs/cluster-api/releases/download/v1.3.0/clusterctl-{OS}-{ARCH}",
-				InitWithProvidersContract: "v1beta1",
-				MgmtFlavor:                shared.FlavorDefault,
-				WorkloadFlavor:            shared.FlavorV1alpha5,
-			}
-		})
+	ctx := context.TODO()
+	// Set environment variables for rendering the cluster templates.
+	// We cannot use shared.SetEnvVar here because it tries to log things
+	// using `By`, which cannot be done outside of `It` blocks.
+	// We cannot put this in an `It` block either since `ClusterctlUpgradeSpec`
+	// contains `BeforeEach` which cannot be inside `It`.
+	_ = os.Setenv("USE_CI_ARTIFACTS", "true")
+	_ = os.Setenv("DOWNLOAD_E2E_IMAGE", "true")
+
+	capi_e2e.ClusterctlUpgradeSpec(ctx, func() capi_e2e.ClusterctlUpgradeSpecInput {
+		return capi_e2e.ClusterctlUpgradeSpecInput{
+			E2EConfig:                 e2eCtx.E2EConfig,
+			ClusterctlConfigPath:      e2eCtx.Environment.ClusterctlConfigPath,
+			BootstrapClusterProxy:     e2eCtx.Environment.BootstrapClusterProxy,
+			ArtifactFolder:            e2eCtx.Settings.ArtifactFolder,
+			SkipCleanup:               false,
+			InitWithBinary:            "https://github.com/kubernetes-sigs/cluster-api/releases/download/v1.3.0/clusterctl-{OS}-{ARCH}",
+			InitWithProvidersContract: "v1beta1",
+			MgmtFlavor:                shared.FlavorDefault,
+			WorkloadFlavor:            shared.FlavorV1alpha5,
+		}
 	})
 })