Is the cost crisis really hampering green business spending?
86% of global organisations plan to boost their investments in sustainability initiatives within the next year, amid the prevailing financial crisis, according to the new iteration of Honeywell's Environmental Sustainability Index (ESI),
The ESI tracks corporate sentiment and tangible progress on sustainability from quarter to quarter.
Sustainability has taken precedence as the primary focus for most companies, with 73% of global respondents citing it as their top priority, surpassing any other concerns such as digital transformation, financial performance, and market growth.
According to the quarterly survey of 750 business leaders, 31% of global companies have intentions to ramp up their sustainability spending by 21% to 49%, the highest level seen since Honeywell started monitoring green investment attitudes last year.
More than 70% of companies remain optimistic about achieving their sustainability objectives within the next 12 months. Similarly, they hold a positive outlook for the longer term, with 73% confident in achieving their goals by 2030.
However, both optimism metrics have seen a decline from the past two quarters.
Within the companies surveyed, 85% are intending to elevate their investments in developing energy efficiency, with a range of 20% to 50%
With this spending boost, 94% of respondents are optimistic about achieving energy evolution near-term and 2030 goals.
Nearly 90% of all surveyed organisations indicate they have experienced either extreme or moderate success in achieving one or more of their environmental sustainability goals during the previous 12 months.
While energy evolution and efficiency remained the top priority, circularity and recycling retained the position as the most successful area for progress over the past 12 months.
Cost crisis impact on small businesses
However, the impact of cost crisis on sustainability efforts has been uneven for large businesses and small to medium-sized enterprises (SMEs).
Honeywell’s ESI revealed that plans to increase energy-related sustainability spending were most common among manufacturers. This is a sector at the sharp end of the price crisis.
An analysis from Make UK, the manufacturers organisation, revealed that 42% of surveyed manufacturers experienced a 100% increase in electricity bills in 2022.
More than half (52%) of companies believed their electricity costs would increase by 100%.
Such intensified energy costs raised concerns among nearly 60% of companies, who viewed them as a threat to their business operations.
Consequently, manufacturers were forced to take drastic measures to offset the rising energy costs.
For instance, 13% opted to curtail their operating hours or avoid production during peak periods, and 7% were forced to suspend production for more extended periods. Additionally, 12% found themselves obliged to implement job cuts directly as a consequence of the surging energy bills.