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%.
Carys Matthews