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UK Business Investment In Sustainability Will Increase Dramatically By 2015

Max 'Beast from the East' Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope. If you find him looking lost on the streets of London, feed him coffee and sugar.

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“Green” spending in Britain is predicted to grow 20 times faster than the economy in the next three years

Spending by large UK companies on energy, environment and sustainability initiatives will grow at an average of 16 percent a year between 2012 and 2015, predicts a new forecast from independent analyst firm Verdantix. The growth in “green” business spending in 2012 alone will be 12 percent, which is twenty times faster than the expected growth of the UK economy (0.6 percent).

Appropriately, the technology sector is ahead of the curve and will add 18 percent of sustainable business spend this year. On the whole, annual growth rates will accelerate as GDP (Gross Domestic Product) rises, and investment in sustainability will increase from  £3.73 billion in 2011 to £6.5 billion in 2015.

The Verdantix  study analysed spending by 421 firms with UK revenues greater than £0.6 billion and cross-industry research into over 1,000 sustainable business initiatives.

Where to put your money

According to the report, some initiatives will experience significant growth while others will barely keep pace with inflation. Fast growing areas of spending between 2010 and 2015 are: smart meters (23 percent), electric vehicles (22 percent), on-site renewable energy (22 percent), product stewardship (21 percent) and sustainable solution marketing (21 percent).

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Initiatives which will experience slower growth rates are: spending on social responsibility (five percent), employee engagement (five percent), environment, health and safety (six percent), regulatory affairs and lobbying (six percent).

“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,” said Susan Clarke, Verdantix Analyst and author of the report.

But this promising future is not certain.

“If the UK economy falls back into recession in 2012, spending on capital intensive initiatives like waste-to-energy plants, electric van fleets or smart meter roll-outs will be delayed or canceled,” commented Rodolphe d’Arjuzon, Verdantix global head of research. “Compared to our original forecast in 2009, growth in spending by large UK firms on energy, environment and sustainability has already slipped back by 18 months. Over the next three years strategic energy management will be the hottest market as firms seek to cut energy expenses by between five and 20 percent.”