According to a new report from independent analyst firm Verdantix,
the U.S. 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 U.S. 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 U.S.
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 U.S. 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, U.S. Sustainable Business Spending 2009-14, finds
that the U.S. 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 U.S. 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 U.S. 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 U.S. 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.