SAN FRANCISCO and LONDON, Nov. 5 /PRNewswire/ -- Despite ongoing uncertainty
about the global economic situation, spending by the world's biggest companies
of developing or acquiring cleantech solutions is robust and primed to
accelerate. This is according to a new survey of more than 300 executives
worldwide from corporations with revenues in excess of US$1bn (two-thirds of
the respondents were from corporations with turnover in excess of US$5bn),
conducted by leading professional services organization Ernst & Young.
Cleantech Matters, Ernst & Young's third annual Cleantech insights and trends
report, highlights the critical role corporations will play in shaping the
industry's next stage of development as it looks to find ways to bridge the
chasm between the laboratory and the marketplace.
The findings offer further evidence that the world's largest corporations are
speeding up their adoption of cleantech products and services to create a
competitive advantage through resource efficiency and sustainable growth.
Their investments are targeting cost efficiencies, new revenue streams and
internal objectives for sustainability and climate change.
As Gil Forer, Global Director of Cleantech at Ernst & Young explains:
"The increasing interest and activity of multibillion-dollar companies around
the globe underscores the growing market opportunities in cleantech. Making
good on those opportunities will likely depend on identifying new partnership
models that enable corporations and emerging cleantech companies to meet their
own objectives while facilitating the arrival of a low-carbon and
resource-efficient economy."
"Also, the rising demand for finite natural resources, spurred by growth in
population and in the numbers of middle-class consumers in emerging-market
countries, is driving the need for corporations to establish a
resource-efficiency agenda to ensure sustainable long-term growth and
competitive advantage."
Adopting cleantech in core operations
For many companies in the survey, spending on clean technology has risen as
high as 3-5% of annual revenues, demonstrating the growing importance of a
cleantech action plan focused on enabling resource efficiency and sustainable
growth.
Two-thirds of the survey's respondents indicated that cleantech has become a
corporation-wide initiative championed by senior management, and 85% reported
significantly or moderately accelerating the pace of their company's strategic
response to climate change compared with two years ago.
Not surprisingly, the largest corporations have led this wave of activity by
employing cleantech solutions or partnering with or acquiring cleantech
companies. Consumer products and other industries with high energy consumption
- as well as high consumption of water and other natural resources - are
setting the pace in establishing cleantech action plans as part of their
overall resource-efficiency and sustainable-growth agendas.
Forer comments on how the importance of Cleantech is now recognized in the
boardrooms of global corporates: "Importantly, cleantech innovation is being
used in companies' core operations; it's not a mere science experiment left to
the Research and Development (R&D) function. Investments are having the most
impact on areas with high energy consumption, such as manufacturing,
transportation and logistics and information technology systems."
Cleantech thriving during the recession
The economic downturn has done little to blunt corporations' appetites for
clean technologies - in fact, the survey shows it may have had the opposite
effect. Nearly 55% of respondents indicated that recovering from the current
crisis will speed the implementation of their company's cleantech strategy.
As Forer explains predictions for future spending on cleantech were equally
bullish. "The vast majority of respondents project their companies will spend
at least US$10 million on cleantech investments by 2010, with 22% predicting a
cleantech spend of at least US$100 million. More than three-quarters of the
respondents expect their annual cleantech spending to rise over the next five
years. The pump is especially primed for companies with lower annual revenues,
who will try to catch up to their bigger competitors by quickening their
adoption of clean technologies, along with seeking out partnerships and
acquisitions involving cleantech companies."
Making an impact on the bottom line
In recent years, the business case for corporate cleantech investments has
evolved from a singular focus on the climate change agenda to a more
comprehensive view of how cleantech can boost the income statement, whether
through new revenues or resource efficiencies. The global financial crisis of
the last two years has not only highlighted and driven the need to employ
clean technologies as important tools for operational efficiency and cost
reduction, it has also quickened their adoption.
The end result is that cleantech investments are guided more and more by
efforts to heighten operational efficiency and cultivate new revenue streams.
Underpinning these efforts is a greater awareness that cleantech delivers
financial returns right away. Survey respondents rated "operational efficiency
to reduce costs" as the most important factor in formulating their company's
cleantech strategy, with "meeting internal sustainability and climate change
goals" and "increasing revenues through existing or new products and services"
not far behind. And they ranked cost benefits as the top factor in determining
their company's spending on cleantech products and services, with 77%
describing it as "very important."
About Ernst & Young's Strategic Growth Markets Network
Ernst & Young's worldwide Strategic Growth Markets Network is dedicated to
serving the changing needs of rapid-growth companies. For more than 30 years,
we've helped many of the world's most dynamic and ambitious companies grow
into market leaders. Whether working with international mid-cap companies or
early stage venture-backed businesses, our professionals draw upon their
extensive experience, insight and global resources to help your business
achieve its potential. It's how Ernst & Young makes a difference.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory
services. Worldwide, our 144,000 people are united by our shared values and an
unwavering commitment to quality. We make a difference by helping our people,
our clients and our wider communities achieve their potential.
For more information, please visit www.ey.com.
Ernst & Young refers to the global organization of member firms of Ernst &
Young Global Limited, each of which is a separate legal entity. Ernst & Young
Global Limited, a UK company limited by guarantee, does not provide services
to clients.
This news release has been issued by EYGM Limited, a member of the global
Ernst & Young organization that also does not provide any services to clients.
SOURCE Ernst & Young
Will White, Media Relations, Global Media Relations, +44 (0)20 7951 3264,
wwhite@uk.ey.com, or Samantha Sims, Americas Media Relations, +1-201-872-1683,
Samantha.Sims@ey.com
