UK green corporate spending forecast to grow rapidly
UK sustainable business spending is set to grow twenty times faster than economic growth in 2012 and will be responsible for driving green growth, it has been claimed.
According to a new study by independent analysts Verdantix, corporate sustainable spending on environmental and sustainability initiatives will grow by about 16% a year between 2012 and 2015.
A poll of 421 UK companies with revenues of more than £750m was conducted as part of the research, with the results forecasting that growth in sustainable business spending in 2012 will increase 12% this year to £4.3bn.
As a result, Verdantix has forecast that spending will increase 15% in 2013 and 17% in 2014 and 2015, generating a market value of £6.8bn. This is in stark contract to forecasted gross domestic product (GDP) growth of just 0.6%.
Verdantix analyst and author of the report Susan Clarke, said: "Despite the sluggish economy, spending by large firms in the UK on energy, environment and sustainability initiatives is set to increase by 12% in 2012. By contrast the UK economy is only expected to grow by a paltry 0.6% in 2012.
"The UK's sustainable business market is continuing to grow at a healthy rate because firms have aligned sustainability strategies with operational efficiency. Energy cost savings and more efficient use of natural resources now underpin sustainability investments - not philanthropic commitments to fight climate change."
The report also revealed that sustainable business spending will be dominated by retail, consumer brands in 2012, with a total spend of about £1.5bn - about 34% of the overall market.
Meanwhile, emissions intensive sectors such as oil, gas, transport and utilities are predicted to spend an estimated £1.1bn on sustainable business initiatives, -representing 25% of the 2012 market. Technology, telecoms and high-tech engineering firms will collectively represent a further 18% of the market, creating a net worth of £792m.
However, the report also predicted significant differences in the spending growth rate for green initiatives, with some experiencing strong growth and others barely keeping pace with inflation.
As a result, it predicts fast-growth areas of spend between 2010 and 2015 coming from smart meters, electric vehicles, on-site renewable energy and product stewardship at almost 25% over the four-year period.
Meanwhile, spending on social responsibility, employee engagement, environment, health and safely is predicted grow at the slower rate of about 6%.