The 5 Growth Areas for Sustainability Spending in 2012

Now is budget-planning time for many a business, when execs must pinpoint next year's strategic priorities and ask themselves how to maximize business revenues for 2012. It's a tricky game, attempting to match annual sales targets with real market opportunities, one that annually produces winners and losers.

Add sustainability into the equation and you've an even more complex market challenge ahead. It already takes up a considerable chunk of marketing budgets -- although savvy shareholders and consumers are becoming adept at spotting greenwash and smokescreens created around technologies that might not have even surpassed the pilot stage yet. And the process of identifying sustainable spending priorities that match wider business objectives is no easy task.

At Verdantix, our research into sustainable business spending across Australia, Canada, the U.K. and the U.S. helps reveal which direction investment is heading. Having investigated 29 energy, environment and sustainability initiatives across 20 industries, we've traced the changing path of sustainable spending, and our research reveals that stakeholder requirements and legislation will drive innovation as firms seek to differentiate with new products and services.

We've identified the five key sustainability priorities that are set to define spending in 2012:

1) Strategic energy management. Rising and volatile energy prices are sending shockwaves of uncertainty into budgets. This, and stricter legislation -- the EU's ETS Phase 3 or suggestions of an Australian carbon tax are just two examples -- mean businesses will switch from tactical, facility-level energy management to enterprise-wide programmes.

Verdantix forecasts that $1 billion-plus firms will invest $10.5 billion in carbon and energy efficiency in the U.S. in 2012; $2 billion in the U.K. and $0.6 billion in Australia. Energy management software providers, such as SAP with its Carbon Impact or JouleX with Energy Manager, will pick up contracts.

2) Product sustainability differentiation. As requirements for legislation such as REACH and RoHS Recast become more stringent, and stakeholders pay greater attention to the sustainability side of products, firms are going to spend more ensuring their products and services are that much greener.