initiatives between 2010 and 2015 will grow by as much as 12 per cent in 2012 – dwarfing UK gross domestic product, which is forecast to grow at just 0.6 per cent. It predicts growth in the market for green goods and services is set to soar from £4.3 million in 2012 to £6.8 billion in 2015 – an average of 16 per cent a year.
The study, which looked at the green business spending of 421 firms in the UK with revenues greater than £750 million, found the biggest overall spending would be on strategic energy management, which will almost double from just over £1 billion in 2010 to £1.98 billion in 2015.
"Over the next three years strategic energy management will be the hottest market as firms seek to cut energy expenses by between five per cent and 20 per cent with access to new integrated energy services propositions," Rodolphe d’Arjuzon, Verdantix global head of research, said.
Biggest growth areasDrilling deeper down, the Verdantix report predicts areas of the green economy to see the fastest growth are smart meters (23 per cent), electric vehicles (22 per cent), on-site
renewable energy (22 per cent), product stewardship (21 per cent) and sustainable solution
marketing (21 per cent).
In 2012, retail and consumer brands will account for the highest spend on green initiatives – £1.5 billion, representing 34 per cent of total spend. Emissions intensive sectors, such as oil and gas, transport and utilities, will spend £1.1 billion, a 25 per cent share of the 2012 market. Spending by technology, telecoms and high-tech engineering firms, meanwhile, will reach £792 million, representing 18 per cent of the market.
"The UK’s sustainable business market is continuing to grow at a healthy rate because firms have aligned sustainability strategies with operational efficiency," commented Susan Clarke, Verdantix analyst and author of the report. "Energy cost savings and more efficient use of natural resources now underpin sustainability investments – not philanthropic commitments to fight climate change."
Mixed picture
But healthy growth is not predicted across the board for green business. Sustainability sending in areas, including social responsibility, employee engagement, environment, health and safety, regulatory affairs and lobbying, are only expected to grow at between five and six per cent between 2010 and 2015 – barely keeping pace with inflation – says Verdantix.
There will also be a knock on effect on green business spending should the UK economy fall back into recession in 2012, as some economist are predicting. In such a scenario, spending on green capital intensive initiatives will be delayed or cancelled, said d’Arjuzon, who predicts waste-to-energy plants, electric van fleets or smart meter rollouts will be among the hardest hit.
"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," he added.
