Global cleantech insights and trends report 2008–09

11 December 2008

Leading entrepreneurs view climate change as a growing strategic concern according to a survey conducted as part of Ernst & Young’s second annual global cleantech insights and trends report, which provides insights into global trends in cleantech investment, financing patterns and public policy.

A significant majority of entrepreneurs surveyed (61 per cent) view climate change as an important strategic concern, while 70 per cent have increased their focus on climate change initiatives over the past 12 to 24 months. In line with broader corporate trends, 80 per cent expect to increase their cleantech spend over the next five years: namely to improve their internal operations and supply chain, and to meet their corporate responsibility requirements. Nearly half (44 per cent) have budgeted at least $1m for climate change investments over the next five years and six per cent anticipate spending upwards of $20m during the same period. Cleantech investment priorities are water efficiency, solar power and electric grid management.

Entrepreneurs recognise that responding to climate change can lead to strategic opportunities to enhance their market position or create efficiencies. Sixty-seven percent cite the opportunity to enhance competitive position as an important strategic driver. Other key opportunities identified include contributing to a wider climate change solution (65 per cent), brand enhancement (63 per cent), gaining customers (61 per cent) and enhancing efficiency (56 per cent).

In terms of climate change-related risks, the cost of energy and other resources was identified as an important risk by the largest number of entrepreneurs (55 per cent), closely followed by a “greening” customer base (54 per cent), energy reliability issues (44 per cent) and operational efficiency/continuity (43 per cent). When asked to identify the single greatest challenge in responding effectively to climate change, the greatest number of respondents (28 per cent) said regulatory uncertainty.

Gil Forer, global director, cleantech, IPO and venture capital initiatives at Ernst & Young comments, ‘Companies simply cannot afford to ignore climate change. Current and expected government regulation combined with consumer demand and technological innovation is catalyzing the corporate response. Climate-smart companies recognize that investing in new technologies and focusing R&D spend or partnering with customers and suppliers to create new initiatives can create significant competitive advantage – from both revenue generation and cost-cutting perspectives.’

In terms of financial return, the majority of respondents (69 per cent) said that their response to climate change would have a positive or neutral impact on the bottom line over the next ten years. Only 31 per cent expected to see a net additional cost to the bottom line.

Setting a formal climate change agenda/ board involvement

Thirty-seven percent of respondents have completed or are in the process of developing a formal climate change agenda. Another 37 per cent identified developing an agenda as a company priority. The majority have taken actions in response to climate change: 76 per cent have identified new products and services; 74 per cent have indentified cost saving opportunities; and 74 per cent have integrated clean technology into the supply chain.

Climate change has moved to the top of the CEO agenda at many leading companies. Of those surveyed with a climate change agenda or one in development, most (69 per cent) kept overall responsibility for climate change response at the full board level. Respondents generally believe that their boards have a good grasp of climate change legislation and risk, and that the information their boards need is largely available.

Only 39 per cent of entrepreneurs surveyed have implemented a review and measuring system to allow the board and executive management to evaluate progress toward climate change objectives. However, another 45 per cent anticipate having measurement systems in place no later than 2012.

Forer said, ‘Cleantech is enabling companies to take advantage of climate change-related market opportunities and internal cost reduction opportunities, such as transforming internal processes and supply chains. But it goes beyond cleantech: innovative solutions to climate change will also be found in new business models, product design, and consumer and business behavior. And it is only by working together – from CEOs and country heads to legislators and consumers – that we will be able to successfully meet the climate change challenge.’

Download the full report here.

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Tags: cleantech

This story was published on Thursday, December 11th, 2008 at 12:24 pm and is filed under knowledge. You can follow any responses to article entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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