Outlook for sustainability budgets positive, analysts say

12th November 2014


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  • Corporate governance

Author

Barry Westwood

Sustainability leaders expect a constant or upward spend trend for budgets over the next year, according to a Verdantix survey.

The analysts surveyed 260 sustainability leaders from 13 countries including the UK as part of their annual survey on sustainability budgets and priorities. This focussed on 21 sustainability initiatives such as energy management, natural capital, reporting and supply chains across a range of industries.

The survey found that sustainability budgets and budgetary control significantly varied in size and contribution. Only 26% of respondents have “significant” budgets between $2.5 million and $15 million, whereas 65% stated they owned sustainability budgets between $1 and $2.5 million.

Only 11% of leaders were shown to have full budgetary control over sustainability activities – a 1% drop on 2012.

Verdantix identified 11 functions that contribute budget for total corporate-wide sustainability spending, including health and safety, facilities management, risk management and supply chain management. This ‘co-funding’ grew steadily from 48% of spending in 2012 to 66% in 2014.

Differences between sustainability team budgets and corporate-wide sustainability spending reflect a pervasive sustainable practice, but one that is not centralised within the sustainability team’s remit, Verdantix concluded.

“We found that while few sustainability leaders point to large budget increases, our results reveal sustainability spending across entire organisations is typically up to ten times bigger than the sustainability team’s budget,” said Yaowen Ma, Verdantix analyst and report author.

Leaders were asked to forecast any changes they expected to their sustainability budgets and gave a largely positive view of what is to come in the next financial year, according to the survey. Over one-third (37%) believed budgets would increase, while nearly two thirds of respondents believed they would remain constant.

Contrastingly, 69% of leaders believed corporate-wide spending would grow, said Verdantix.


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