Some 62% of business executives around the world plan to increase their sustainability budgets, a 10-percentage-point increase on last year, a new study by Capgemini has revealed.
The average increase in sustainability budget is expected to be around 10.5%, Capgemini’s study, Navigating uncertainty with confidence: Investment priorities for 2025, found, noting that many companies now see ESG investment as a ‘value-add’ as they seek to develop a more sustainable business structure.
‘Important aspect’
‘Although investment growth in sustainability has slowed, sustainability still remains an important aspect of businesses’ future plans, with sustainability investment focusing on climate technologies, sustainable product design, biodiversity, and water,’ the report noted.
The core focus area for investment is in climate technologies, including hydrogen, renewable energy, batteries, nuclear energy and carbon capture, with 72% of executives planning to spend more in these areas.
Within this, batteries are seen as the top climate technology investment in 2025, with more than half of executives ranking this in their ‘top 3’, especially those within manufacturing firms and automotive manufacturers.
In addition to climate technology, other top areas cited for increased investment are sustainable research and development and product development, biodiversity protection and restoration, and water conservation/management.
Key priorities
Overall, essential priorities cited as key business drivers in 2025 by the report include building resilient supply chains; leveraging sustainability as a growth driver; adapting to regulatory changes and geopolitical uncertainties; developing nearshoring and friendshoring partnerships; and accelerating digital transformation.
Some 62% of large firms expressed optimism about growth prospects for 2025, the study found, an increase on 56% in 2024. However, cost reduction is also seen as a major focus area, with 56% of organisations prioritising it over revenue growth.
At the same time, some 50% of companies plan to increase overall investments to bolster efficiency and competitiveness. Read the full report here.
