UK business sustainability spending is set to increase by 13% year-over-year between 2025 and 2030, according to research.
The growth in sustainability budgets at UK businesses is expected to accelerate from an annual rate of 8% between 2018 and 2020, to 12% from 2022 to 2025 and 13% between 2025 and 2030.
The analysis from Cognizant Research and Oxford Economics predicted growth since 2018 will lead to a 260% increased spend by UK businesses on sustainability by 2030.
Rohit Gupta, UK and Ireland country head for Cognizant, said: “Businesses need to create a new way of producing goods and services that meets not only economic, but environmental needs as well.
“UK businesses have already made a positive start, but looking forward, it will be the ones who form partnerships to creatively deploy emerging and maturing technologies that are able to meet their sustainability goals.”
Based on the findings of the survey, the study puts forward recommendations for how UK businesses can outperform their markets with “enduring and differentiated growth” by embedding sustainability in their practices.
More than four in five (81%) UK businesses currently use digital tools to make operations more energy efficient. However, the research’s authors argue there is still “substantial work” to be done to improve the sustainability of internal operations.
By 2025, the top sustainability initiatives will require a greater level of data sharing and more sophisticated analysis. The study predicts that over 40% will start employing digital twins, while 35% will use data analytics to identify areas to improve resource efficiency, reduce waste and limit environmental harm.
Organisations should use their internal operations work as a platform to broaden the scope of sustainability initiatives externally.
“Businesses can gain greater rewards by using digital technologies to extend their reach to obtain visibility and increase their influence across the entire value chain,” according to the report.
Over half (53%) of respondents to the study are focusing sustainability strategies on developing and launching products and services to grow their contribution to address environmental challenges.
UK businesses are already effectively deploying cloud, internet of things (IoT) and data analytics technologies to accelerate sustainability transformation, but other lesser-deployed technologies that could be more impactful, the research said.
Two fifths (41%) of businesses in the UK have applied intelligent automation, for example, but nearly nine in 10 of those that have say it’s been effective. Similarly, while only 28% of businesses are using 5G, 66% of those have said it’s been effective.
The report identified a counterproductive balance of power regarding the responsibility and accountability for the success of sustainability initiatives.
While it’s primarily CEOs in the UK who allocate the sustainability budget (53%) and approve the sustainability strategies (67%), very few (7%) are accountable or have their performance measured against the strategy’s success, with the responsibility often falling to the chief sustainability officer and senior managers.
Better recognition of the mutual dependency between the C-suite and its universal ownership of the sustainability agenda will unlock out-sized returns, the research said.
