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Sustainable consultancy market to grow 4% a year to 2020

Companies are expected to contract corporate sustainability-related consultancy services worth $1.09bn by 2020, up from $877m today, a report by research firm Verdantix calculates. In terms of current practices, meanwhile, the research shows that consultancy projects are also cropping up across a wider variety of business functions, with corporate social responsibility or sustainability teams accounting for less than half (48%) of all CSR consultancy spend. The proportion spent by CSR teams increases to 60% for sustainability reporting advice. At present, companies spend an average of $150,000 to $200,000 on CSR consultants per year, which Verdantix describes as “below ideal deal sizes”. While demand for consultancy services is expected to grow between now and 2020, consultants will therefore find themselves with smaller-scale contracts and issue-specific projects. The findings are based on interviews with 260 heads of sustainability in 13 countries across 21 industries, plus background data.

Sustainability consulting: Global Market Forecast 2015-2020, Verdantix

Millennials most engaged on sustainability

Millennial investors are nearly twice as likely as the average to invest sustainably, a new report by Morgan Stanley finds. More than one in five Millennials (or “Generation Y”, those aged 18-35) are likely to invest in companies or funds that target specific social or environmental outcomes, compared with 12% of investors overall. Members of this younger demographic are also more likely to factor sustainability into their daily lives. They are nearly three times more likely to seek employment with a company because of its social or environmental stance than the average workers (14% compared with 5%). They are nearly twice as likely to buy from a brand with a good sustainability reputation (15% of Millennials consider themselves “ethical” shoppers, compared with an average of 7%) and nearly twice as likely to check a product packaging (40%, compared with an average of 22%). The report also finds that 44% of women have taken one or more “sustainable consumer actions” compared with 32% of men. By 2050, Morgan Stanley calculates that the business opportunities for sustainability-focused companies with range between $3tn and $10tn annually, equivalent to 4.5% of global GDP.

Sustainable Signals, Morgan Stanley Institute for Sustainable Investing

Electric vehicles could reduce UK fuel bill by £13bn

A boom in electric vehicles (EVs) could cut UK oil imports by 40% by 2030, reducing fuel costs to UK drivers by £13bn, according to a new report commissioned by the European Climate Foundation. The UK’s EV sector received £17.6bn in investment between 2003 and 2013, the report also notes. Another positive finding centres on EV sales, which are reported to have increased fourfold in the UK last year. EVs are expanding in the rest of Europe too, with sales across the EU increasing by more than one third in 2014. Germany is the single country with next fastest growth to the UK’s, registering a 70.2% growth in sales last year. Even so, total sales remain at a mere 75,331 vehicles across the EU. As well as potential fuel reductions, the report anticipates a 47% drop in automotive carbon emissions by 2030 if sales continue at the current pace. Improvements in air quality due to fewer pollutants such as nitrogen oxide (which could drop by 113,000 tonnes per year) could save the UK’s National Health Service £1bn through a reduction in respiratory diseases.

Fuelling Britain’s Future

US healthcare sector shows appetite for going green

US hospital managers expect that the number of hospitals integrating sustainability into product purchasing will increase from 54% today to 80% by 2016, according to figures released in a new report by Wharton University of Pennsylvania. The research, commissioned by Johnson and Johnson, also finds that 76% of healthcare professionals are more likely to buy a product or service from a company that they believe has environmentally sustainable practices. Three in five hospitals in the US, meanwhile, have a strong commitment to sustainability from top management, healthcare professionals say. The report cites separate research from the Commonwealth Fund that indicates that energy conservation, reduced waste and more efficient purchasing could save the healthcare industry more than $15bn over 10 years.

Greener Hospitals: Building Consensus for Health Care Sustainability, Wharton University

Solar to be cheapest energy in next 10 years

Solar power will soon be the cheapest form of electricity in many regions of the world, with costs dropping to €0.40-€0.60 per kilowatt-hour (kWh) by 2025, according to German renewable energy analyst Agora Energiewende. Even with no major technological breakthrough, costs could shrink further by the middle of this century, to between €0.20-€0.40/kWh. To realise such cost reductions will require a change in regulatory regimes, which currently push up costs by up to 50% through the high cost of finance. The highest potential for solar is in India, the Middle East and North Africa. The report’s authors take some of their confidence from the experience of Germany, where the cost of power from large scale photovoltaic installations fell from over €0.40/kWh in 2005 to €0.09/kWh in 2014.

Current and Future Cost of Photovoltaics, Agora


Institutional insights

Resource efficiencies could save EU companies £448bn

The world’s developed economies are currently consuming the resources of 2.6 planets, almost twice as much as the average country’s consumption, a report by WWF finds. Measures to improve resource efficiency could drive savings for EU businesses worth €630bn (£448bn) per year, the UK-based charity finds. The report cites research by the European Commission that indicates that investment in a more resource-efficient “green economy” could create 20m jobs between now and 2020. WWF is pushing European policy makers to introduce a “binding and ambitious” resource efficiency headline target by 2030. In terms of energy use, meanwhile, WWF is calling for a 40% increase in energy efficiency. It also wants governments to commit to generating 45% of all energy from renewable sources by 2030.

From Crisis to Opportunity: Five Steps to Sustainable European Economies, WWF

Fairtrade reports first fall in sales for two decades

UK sales of Fairtrade products fell for the first time in two decades in 2014, sliding 3.7% year-on-year to £1.67bn. Sales of some ethically traded products have been hit by a general slump across all products in their category. In 2014, sales of sugar fell by 5% and cotton by 38%, for example. In this respect, a 1% and 2% fall in Fairtrade items in these respective categories bucks the market trend. Meanwhile, sales of bananas grew by 3%, thanks in part to Tesco’s decision to relist a product line early in the year. Retailer policies also saw a boost for Fairtrade coffee sales, which increased by 3% after brands such as Tesco, Waitrose and Wild Bean Café started stocking Fairtrade-certified brands. Over 5,000 products now carry the Fairtrade Mark, bringing material benefits to an estimated 1.5m farmers and workers in 74 developing countries.

Fairtrade Foundation

Global SRI above $21tn

The global sustainable investment market reached $21.4tn last year, up from $13.3tn in 2012, incorporating nearly one third of all professionally managed assets in Europe, the US, Canada, Asia, Japan, Australasia and Africa. Figures from the Global Sustainable Investment Alliance find the largest segment in market is negative screening/exclusions ($14.4tn), followed by environmental, social and governance (ESG) integration ($12.9tn) and corporate engagement/shareholder action ($7tn). From the beginning of 2012 to the start of 2014, assets committed to sustainability-themed investments grew 30% in dollar terms. According to the report growth has been fastest in the US, followed by Canada and Europe. The overall market of sustainably managed assets in the US stood at $6.57tn, a 76% increase over the $3.74tn identified in sustainable investing strategies at the outset of 2012.

2014 Global Sustainable Investment Review, GSIA


Company snapshots

More than half of Philips’ sales are ‘green’

More than half (52%) of sales at Dutch diversified technology company Philips relate to products with one or more environmental attributes, according to the company’s latest integrated annual report. Sales of its so-called “Green Products” reached €11.1bn in 2014. The Amsterdam-based business also revealed that it has invested €463m in its environmental research and innovation programme, which aims to address global challenges related to care, materials and energy efficiency. Philips estimates that 1.9bn lives were improved in 2014 as a direct consequence of its products.

Philips 2014 Annual Report

Anglo puts job creation at nearly 100,000

Over the past seven years, mining company Anglo American claims to have supported the creation of 96,873 jobs. The London-listed company has also provided more than $100m in funding for enterprise development and supported 58,257 SMEs inside and outside its supply chains. More than one third of the jobs (38,300) created by the firm derive from two programmes: Zimele in South Africa and Emerge in Chile. Other highlights in its latest Sustainable Development Report include water savings of 16% in its mine operations (it now consumers 195m cubic metres in total) and greenhouse gas emission reductions of 4.2m tonnes of carbon dioxide equivalent.

Anglo American Sustainable Development Report 2014

Triodos clocks healthy profits

Triodos Bank saw its net profits increase 17% last year, from €25.7m in 2013 to €30.1m in 2014. The balance sheet total of the ethical bank grew by 11% to €7.2bn over the same period, while its total assets under management increased by 10% to €10.6bn. A factor in the Dutch bank’s success owes to an increase in its customer base, which grew by 13% to 530,000 last year. Triodos runs 17 investment funds and specialises in sustainable sectors such as microfinance, organic agriculture and clean tech. The bank, which has branches in the Netherlands, Belgium, the UK, Spain and Germany, and an agency in France, delivered a return on equity of 4.4%.

Triodos Bank

Henkel in line with efficiency targets

Since setting a resource efficiency reduction target of 30% in 2011, Henkel has achieved improvements of 20% in energy efficiency, 19% in water use and 18% in waste volume. The German chemical products manufacturer also reports a 25% increase in occupational safety over the past three years. Henkel supported 2,265 social projects in 2014, representing an investment of €8.2m. In terms of its supply chain, the company conducts 1,100 sustainability assessments of its suppliers last year. Of those who underwent a repeat audit, nine in ten demonstrated improved sustainability performance.

Henkel Sustainability Report 2014

Adidas exceeds 2014 Better Cotton target

Adidas Group exceeded its 2014 target to buy 25% of its cotton from the sustainable certified Better Cotton Initiative (BCI). The German-based clothing company sourced 30% of all its cotton from BCI compliant producers, setting it on the right trajectory to hit a 40% target this year. Adidas has said all its cotton supply will be BCI certified by 2018. BCI has 384 members (including 34 retail brands) and covers cotton production in a dozen countries.


Adidas  Anglo American  cotton  CR Cheat Sheet  electric cars  Fairtrade  healthcare  milennials  natural resources  solar energy 

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