A new sustainability index that tracks hundreds of businesses across industries in areas such as energy efficiency, emissions reductions, and recycling has been launched by Honeywell, with initial results showing companies are prioritizing sustainability initiatives over any other operational category.
The Environmental Sustainability Index is designed to show quarterly trends of businesses’ sustainability initiatives. Companies that participated in the index say sustainability objectives in their business plans are a higher priority than financial results and digital transformations.
The first release of the index’s findings shows that 97% of businesses are planning to increase their spending in at least one sustainability category and more than half in all four metrics analyzed. Sustainability issues overall were listed as a top five priority of 65% of the businesses, with financial results coming in at 62%, and digital transformations at 55%.
The index is based on a survey of 653 business leaders who are directly involved in their companies’ sustainability initiatives. Industries include manufacturing, technology, health care, energy, transportation, consumer goods, finance, and the public sector. The survey took place during the second and third quarters of 2022, and the main categories studied are energy evolution and efficiency, emissions reduction, pollution prevention, and circularity and recycling. The index finds progress in initiatives across all four categories, Honeywell says.
However, improving energy efficiency is the main focus of the businesses, with nearly three-quarters of them saying it was their first or second priority. Recycling measures were the least important to respondents, with 28% saying it was their first or second priority.
On average across the four categories, 62% of respondents say they will reach their sustainability goals over the next year by adjusting their business practices. Just 16% say they will achieve short-term goals through technology-driven advancements and by upgrading or replacing current systems with more sustainable ones.
Technology improvements are widely seen as key to achieving sustainability goals. Advancements are rapidly being made in digital processes that do everything from automating operations that will improve energy efficiency, with technology like artificial intelligence seen as a key piece of energy transitions, and creating data for emissions disclosures.
“No matter companies’ maturity, the real opportunity lies in leapfrogging into a technology-driven approach to sustainability,” says Evan van Hook, chief sustainability officer of Honeywell. “This will help make faster progress.”
Even though recycling was not the highest priority in the index, more businesses said they were “extremely successful” over the past 12 months in reaching those targets than any other topic.
Led by the healthcare industry, 59% of businesses say they were most successful with recycling and circularity. Over the next year, 42% of the companies also see recycling holding the most potential, with 42% forecasting success, compared with 33% in energy efficiency improvements. Recycling and circularity also had the most optimism of achieving goals through 2030, with 40% of businesses expressing extreme optimism in the area.
Despite the lower priority listed by businesses in the index, recycling initiatives have been a growing trend. There have been acquisitions to improve recycling operations, new technologies to make materials reusable, and products made from all recyclable materials.
Manufacturing, construction, and industrial led the way in claiming success in both energy improvements and emissions reductions. The government and public sector had the most optimism about achieving near-term goals in every category.