The need to drive down energy costs and consumption and make more efficient use of natural resources are the main forces behind a significant growth in spending on green goods and services by UK businesses over the next four years, a new report forecasts.

According to the study by independent analyst Verdantix, UK spending by Britain’s largest firms on energy, environment and green 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 areas

Drilling 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."

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Source: GreenWise Business.com