Over 85% of Companies Plan to Increase Spending this Year on Emissions Reduction, Energy Efficiency: Honeywell
A large majority of companies are maintaining plans to increase investments in environmental sustainability initiatives in the face of economic headwinds, according to the latest release of the Environmental Sustainable Index by industrial products, solutions and technologies company Honeywell, which also indicated an increased focus on technology-based solutions by companies to hit their sustainability goals.
Honeywell launched the index in Q4 2022, with updated releases planned quarterly, aimed at providing insight into how business leaders feel about the progress that’s being made toward their organizations’ sustainability commitments. For the report, produced in collaboration with Futurum Research, Honeywell surveyed more than 750 business, technology, and sustainability professionals directly involved in the planning, strategic development, implementation, or oversight of environmental sustainability goals and initiatives, at companies across multiple regions and economic sectors.
One of the most significant changes from the prior quarter’s report was the emergence of economic and geopolitical concerns as the top anticipated barrier to the achievement of companies’ environmental sustainability goals, replacing pandemic-related issues as the highest concern in the prior survey.
Despite the economic and geopolitical concerns, however, the professionals surveyed appeared to be more confident in their ability to reach their near- and longer-term sustainability ambitions, with 74% of respondents reporting being optimistic about hitting their upcoming 12-month goals – up from 68% in the prior survey – and 74% similarly optimistic about their 2030 goals, compared to only 63% last quarter.
Darius Adamczyk, chairman and CEO of Honeywell, said
“Despite challenging macroeconomic conditions, organizations remain committed to the fight against climate change and their sustainability goals. While data shows an increased sense of optimism towards reaching goals, we know decision makers are still very perplexed on what their respective journeys and roadmaps look like towards their targets.”
The professionals’ confidence in hitting their goals was higher in each of the survey’s four identified categories, including energy efficiency and evolution, emissions reduction, pollution prevention, and circularity/recycling.
The economic environment does appear to have had some impact on companies’ environmental sustainability investment intentions, however. A smaller proportion, although still representing a broad majority, of respondents continued to report plans to grow spending across categories. Expectations to increase investments over the next 12 months in were reported by 88% of respondents for energy efficiency (down from 91% in the prior survey), 85% for emissions reduction (88% prior), 83% for pollution prevention (86%), and 84% for circularity/recycling (84%). Notably, only 2% of respondents in each category reported plans to decrease investments.
Within those companies that continue to expect to increase investments, many are planning for more significant increases than had been previously expected, particularly in the area of energy efficiency, with 50% of respondents reporting plans to grow spending in this area by more than 20%, compared to 43% in the prior survey. Similarly, around half plan to increase investments by more than 20% in each of the other categories as well.
The survey also indicated a shift in the methods companies plan to use to achieve their sustainability goals. While process-driven changes – modifying or eliminating operational processes or business behavior – remains the top approach, reported by 43% of respondents, this marks a sharp decrease from the prior survey’s 62%. 24% of respondents now focus on technology-driven changes, compared to 21% last quarter, while the biggest increase was reported in a balanced blend of process and technology, reported by 33%, compared to only 17% in the prior report.
Evan van Hook, Chief Sustainability Officer of Honeywell, said:
“I am encouraged to hear companies are increasingly using technology integrations to achieve their goals. Regardless of where companies are on their sustainability journey, incorporating technology initiatives into their sustainability strategy will accelerate progress.”
Click here to access Honeywell’s 1Q 2023 Environmental Sustainability Index.