Go figure: Sustainability execs' budgets down, headcounts up

GreenBiz Intelligence Panel

Go figure: Sustainability execs' budgets down, headcounts up

It’s clear that between fiscal cliffs and debt ceilings, even corporate sustainability efforts aren’t immune to the stalemate in Washington. There’s a retreat in terms of budgets, and the state of the economy remains the No. 1 determinant of companies’ ability to continue or accelerate work on environmental issues. But there are a few bright spots: Sustainability staffs are growing and are looking for a little more public recognition for recent efforts.

We first reported in our recent State of the Profession report that sustainability budgets were shrinking even as the size of dedicated sustainability teams are increasing. In our latest survey, we asked whether corporate environmental, health and safety (EHS) spending for 2013 would be greater, staying the same, or less than in 2012. After three years of increased investment, EHS spend is ratcheting back. Figure 1 shows a nine-point increase in the number of companies that will spend less this year than last. Only 32 percent are spending more than last year whereas in 2012, 41 percent said spending would be greater than the previous year.

True, these are not the budget-slashing numbers of 2009, but they do reflect a corporate conservatism that appears to have set in. This year, for the first time, we asked the same budget question in regard to corporate social responsibility (CSR) spending. Eleven percent of our panel members said they were spending less on CSR than in 2012, and 34 percent indicated their spending would be greater than last year.

While they may not be growing their budgets, teams are still growing. Twenty-four percent of those responding from large companies have open requisitions and are increasing headcount — a good sign for job hunters. While the number of opportunities is just slightly down from the past two years, there are three times as many growing their staff than we reported in 2009, when only 8 percent were increasing headcount.

R-E-S-P-E-C-T and Energy Efficiency

Channeling their inner Aretha Franklin, those in sustainability are looking to get a little more respect and recognition for their environmental commitments and achievements. This is the first year we included that response as an option and it is clear that many in the profession feel their good work is simply not getting the attention it deserves.

For the past five years the No. 1 initiative has been reducing energy use through efficiency. The one area that has dropped as a primary initiative is green product development. We asked panel members separately about their investment in green product development; 47 percent said it would be greater than last year. While down from a high of 59 percent in 2010, it is still significant that almost half of those companies responding view developing new green products as important for their company’s long-term prospects.

Economy and Company Leadership Now Biggest Impacts

We asked what is having the most impact on companies in terms of continuing or accelerating work on environmental issues. In past years, customer requirements have held the top spot but this year those requirements have been supplanted by the economy.

In a separate question, we asked if the economic pressures of the past few years had hindered corporate sustainability activities. While 45 percent were not affected by the economy, 28 percent said the economy caused them to cut back on environmental and sustainability activities. On the other hand, 21 percent claimed economic pressures caused their companies to invest more in environmental and sustainability activities.

A more reassuring trend is that company leadership has been steadily increasing as a factor accelerating work on environmental issues. In 2009 only 12 percent cited this as a factor while in 2010 it jumped to 19 percent and has been steadily climbing ever since.

Of much less impact is any anticipated regulation on carbon — only 3 percent identified that as a factor. However, 81 percent expect increased environmental regulations over the next four years. That’s up from 72 percent last year.

Come See Us At GreenBiz Forum

We’ll be providing many more of our insights into the evolving nature of the green economy and the sustainability profession — and perhaps reading a few more of the tea leaves — at our GreenBiz Forums in New York and San Francisco. Come join us to discuss what’s in store for 2013.

Image of man pushing rock by Sergey Nivens via Shutterstock