sustainability spendingUsing financial data from 1,833 firms with US revenues of more than $1 billion in 2008/09, independent analyst firm Verdantix finds that spending on 29 sustainability initiatives will grow from $28 billion in 2010 to $60 billion in 2014. Over the 2009 to 2014 period the US sustainable business market will experience a 19% compound annual growth rate. The sustainable business market forecast finds that growth of 11% in 2010 will increase to 16% in 2011 and 24% in 2012. Growth in spending is driven by improved economic growth, risk drivers, competitive dynamics, innovation diffusion, higher oil prices, state-level GHG regulations and renewable energy policies. The study covers all industries and all sustainability initiatives from energy efficiency to spending on strategy, risk and brand.

by Tracey de Morsella, Green Economy Post

According to a new report from independent analyst firm Verdantix, the US sustainable business market will double to $60 billion in 2014 from $28 billion in 2010, sustainability spending will increase by 11% in 2010 compared to 2009. This positive trend will continue with a year-on-year increase of 16% in 2011 accelerating to growth of 24% in 2012. Over the 2009 to 2014 period the compound annual growth rate will be 19% across all 20 industries covered by the market forecast.

“In the US market, executive awareness of the business benefits of sustainability is on the rise” said Verdantix Director, David Metcalfe. “The elevation of sustainable business decisions to the C-Suite drives increased expenditure across all sustainability issues. But the US market is still 2 years away from rapid growth due to the sluggish global economy, delayed federal regulations and a lack of mature programs in firms with revenues of less than $10 billion,” he added

Based on research of over 1,250 US corporate sustainability programs, the Verdantix model defines sustainable business spend across 29 sustainability initiatives. Initiatives covered include spending on energy efficiency, carbon management, sustainability strategy, risk management, cleantech innovation, sustainable operations, human capital investments and industrial emission reductions.

The Verdantix report, US Sustainable Business Spending 2009-14, finds that the US sustainable business market will exceed $32 billion in 2011, grow to $40 billion in 2012 and hit $49 billion in 2013. Compound annual growth rates (CAGRs) for the 29 sustainability initiatives covered by the Verdantix Critical Moments® market forecast vary from 4% to 50% over the 2009 to 2014 period. Spending on electric vehicles and infrastructure will grow at a 50% CAGR to $2.8 billin in 2014 and for smart grid the CAGR is 39% and energy and carbon data management 34%.

From an industry perspective, over the 2009 to 2014 period, power utilities and automotive firms will increase spend at a compound growth rate of 24%, high-tech engineering at 22% and industrial engineering at 21%. By contrast, compound growth rates for banks and retailers will reach just 14% over the 2009 to 2014 period and media and insurance firms just 15%.

“Expectations for US economic growth between 2010 and 2014 are in the 1% to 2.5% range. So the 19% growth rate for sustainable business spending makes sustainability an attractive market” stated Vanessa O’Connell, author of the report. “Despite the positive growth rates this is a small market compared to the overall size of the US economy. Big variations in sustainability spend, program maturity and organizational design will make sales and marketing a challenge in the sustainability market over the next 2 years. From 2013 we expect to see more consistency in sustainable business strategies and more centralized budgets managed by Chief Sustainability Officers.”

The Verdantix Critical Moments model is based on analysis of market drivers including energy and climate change policy at federal and state level, competitive dynamics within industries, innovation diffusion, risk drivers, oil, natural gas and electricity price forecasts, and US and global GDP growth forecasts. The findings are validated with detailed case studies on corporate sustainability strategy covering firms like Citigroup, FedEx, Google, Hilton Worldwide, Intel, Johnson Controls and PG&E.

For more information about the report, “US Sustainable Business Spending 2009-14,” visit the Verdantix web site.


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© 2010 – 2011, Tracey de Morsella. All rights reserved. Do not republish.

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Author: Tracey de Morsella (323 Articles)

Tracey de Morsella started her career working as an editor for US Technology Magazine. She used that experience to launch Delaware Valley Network, a publication for professionals in the Greater Philadelphia area. Years later, she used the contacts and resources she acquired to work in executive search specializing in technical and diversity recruitment. She has conducted recruitment training seminars for Wachovia Bank, the Department of Interior and the US Postal Service. During this time, she also created a diversity portal called The Multicultural Advantage and published the Diversity Recruitment Advertising Toolkit, a directory of recruiting resources for human resources professionals. Her career and recruitment articles have appeared in numerous publications and web portals including Woman Engineer Magazine, Monster.com, About.com Job Search Channel, Workplace Diversity Magazine, Society for Human Resource Management web site, NSBE Engineering Magazine, HR.com, and Human Resource Consultants Association Newsletter. Her work with technology professionals drew her to pursuing training and work in web development, which led to a stint at Merrill Lynch as an Intranet Manager. In March, she decided to combine her technical and career management expertise with her passion for the environment, and with her husband, launched The Green Economy Post, a blog providing green career information and covering the impact of the environment, sustainable building, cleantech and renewable energy on the US economy. Her sustainability articles have appeared on Industrial Maintenance & Plant Operation, Chem.Info,FastCompany and CleanTechies.

  • http://www.certifiedsustainabilityofficer.com R Michael Richmond

    It is great to see this kind of breakthrough. As seen in EO #131514 this will be helped by installing a CSO in every company capable of developing a sustainability plan that provides professional guidance to a Green-committed organization.