Corporate spending on initiatives to enhance energy, environment and sustainability management will grow by less than 10% in 2013 according to a new global survey of 250 heads of sustainability conducted by independent analyst firm Verdantix.
However, nearly three-quarters of responding firms now claims to have a sustainability leader who reports into the CEO or another member of the executive committee.
“Only 11% of Heads of Sustainability anticipate increasing spend by more than 10% in 2013 compared to 2012” commented Patricia Satkiewicz, Industry Analyst at Verdantix and author of the report.
“We found that 46% of the 250 budget holders expect their spend on sustainability to increase by up to 10% in 2013, 39% face flat budgets and 4% will receive less cash than in 2012. On a global basis, we anticipate growth in sustainability budgets of 5% to 7% in 2013.”
The Verdantix report, “Global Sustainability Leaders Survey: Budgets And Priorities” is based on interviews with 250 Heads of Sustainability in Australia, Brazil, Canada, China, France, Germany, India, Mexico, the Middle East, Russian, South Africa, the UK, the US.
According to the Heads of Sustainability surveyed:
* 21% of CEOs view energy, environment and sustainability as issues that already impact the quarterly and annual financial performance of their firms, but 50% of CEOs view sustainability as a long-term issue or new concept
* A quarter of firms spend at least 2% of revenues on the full range of energy, environment and sustainability initiatives and another quarter estimate those expenditures range from 1% to 2% of revenues
* Up to 47% of respondents lacked the budget to fund core sustainability initiatives, requiring them to “tin cup” around other budget holders to get funding
* Sustainability innovation, marketing and employee engagement will receive the biggest boost in investment in 2013, while consulting and software implementation rank bottom
* Energy management and EH&S management are the key areas to improve in 2013, reflecting the desire of Heads of Sustainability to muscle in on the operational areas which impact their results.
“Global GDP growth of 3.6%, electricity prices, oil prices, new environmental regulations and business innovation lie behind the growth in sustainability spending in 2013. But a 5% to 7% increase will not trigger transformational change,” commented David Metcalfe, Verdantix CEO. “To achieve their ambitions, Heads of Sustainability need to identify new ways to connect with the CFO.”