Honeywell has released its 2Q 2023 Environmental Sustainability Index (ESI), a quarterly indicator of key trends, sentiment, and progress on global climate change mitigation and other sustainability initiatives and produced in partnership with The Futurum Group. The ESI surveyed more than 750 business leaders directly involved in their organization’s environmental sustainability initiatives, at a time when ESG-related regulations and global calls to action are mounting.
The third edition of the ESI revealed that sustainability continues to lead all other corporate initiatives, including digital transformation and market performance, and now by a 19-point gap.
Across all geographies, Energy Evolution and Efficiency is the top sustainability priorities over the coming six months, followed by Emissions Reduction, Pollution Prevention, and Circularity/Recycling initiatives. This trend is aligned with the previous two quarters, but Circularity/Recycling is showing more growth than any other category, indicating that organizations may take a deeper look at their supply chains and flow of materials to elevate how products, services, or resources are renewed or regenerated, rather than wasted in the second half of 2023.
“Our data shows that companies aren’t wavering in their commitment to sustainability,” said Vimal Kapur, President and Chief Operating Officer of Honeywell. “Not only are leaders keeping it at the top of the priority list despite other looming challenges, but they are also increasingly taking actions.
“This upward trendline in optimism goes hand-in-hand with technology adoption — more organizations are turning to newer, more efficient, more sustainable technologies to help achieve their goals. Honeywell’s solutions are ready now to support ESG efforts and help organizations around the world reach their sustainability targets.”
In 2022, ESI data showed organizations were overwhelmingly focused on process-driven approaches to environmental and sustainability initiatives. In 1Q 2023 that shifted with more organizations taking a balanced approach to their initiatives. A technology driven approach was also growing, albeit at a slower pace. However, this quarter, the shift towards tech driven approaches increased. 56% of respondents noted leveraging more technology for achieving environmental sustainability goals over the coming 12 months.
Businesses across the globe are realizing that sustainability is not just an option but a necessity for a better future. Sustainability now outranks other top priorities and is considered the foremost requirement for the long-term growth of any business,’ said Ashish Modi, President, Honeywell India. “As highlighted by the Honeywell Environmental Sustainability Index, energy evolution and efficiency will continue to remain the top sustainability priority for organizations over the coming months. At Honeywell, we are dedicated to drive the transformation towards a more sustainable future by developing innovative technologies that reduce environmental impact while driving business growth. We are committed to supporting our customers in achieving their sustainability goals and creating a better world for generations to come.”
“More has changed in the past three months than we anticipated. The third release of Honeywell’s Environmental Sustainability Index provided new data showcasing an increasing commitment to technology that supports environmental sustainability activities,” said Daniel Newman, principal analyst and CEO of The Futurum Group. “This quarter we are seeing the shift move toward the tech driven approach with the number of organizations opting for a balanced approach decreasing, and organizations taking a process driven approach decreasing or remaining unchanged. As we move further into the decade and get closer to the 2030 target, we anticipate that the trend of a tech driven approach will continue.”
“Companies are continuing to invest in technology that helps them achieve their environmental sustainability goals,” said Evan van Hook, chief sustainability officer of Honeywell. “We are seeing firsthand our customers take action to achieve goals, whether it’s switching to sustainable aviation fuel, tracking and reducing carbon emissions from buildings, or increasing advanced circularity solutions, such as plastics recycling. With AI becoming more prevalent, technologies will only get smarter and more efficient, and make an outsized impact on sustainability efforts.”
More key highlights from the study include:
- Many businesses continue on track with their previously-set sustainability commitments towards 2030 and are feeling positive about achieving them. Optimism for achieving those goals across all categories has increased quarter over quarter. Globally, 75% of respondents cited optimism in achieving overall environmental sustainability goals across all categories by 2030.
- Looking at the U.S. specifically, 71% of respondents cited optimism in achieving overall environmental sustainability goals related to emissions reduction by 2030. Moreover, 70% of U.S. respondents reported their organization is increasing investments to achieve its environmental sustainability goals specifically related to emissions reduction for the coming 12 months.
- When asked about achieving near term goals within the next 12 months, respondents cited confidence in achieving overall environmental sustainability goals with optimism increasing 1% from last quarter to 74%. However, in the U.S. specifically, just 69% of respondents cited optimism in achieving near term goals, down from 74% in the previous quarter. Compared to global survey results, there is a more pessimistic attitude in the U.S. for the next 12 months.
- The Asia Pacific (APAC) region continues to prioritize sustainability goals more than any other region including EMEA, North America, and Latin America. APAC also reports “extreme success” across all four categories: Emissions Reduction, Energy Evolution and Efficiency, Pollution Prevention, and Circularity/Recycling. However, Latin American business leaders are the most optimistic with 84% expressing confidence in their organizations’ ability to achieve ESG goals by 2030.
- Consumer Goods reports higher extreme success in Pollution Prevention, and Circularity and Recycling than any other sector. In Energy Evolution and Efficiency, Consumer Goods and Manufacturing, Construction, and Industrial report the same level of extreme success (60%). For Emissions Reduction, Banking & Personal Services leads all other sectors.
Honeywell itself committed in April 2021 to become carbon neutral in its operations and facilities by 2035 through a combination of further investment in energy savings projects, conversion to renewable energy sources, completion of capital improvement projects at its sites and in its fleet of vehicles, and utilization of credible carbon credits where needed. These initiatives represent a continuation of the company’s sustainability efforts that began in 2004 and have already yielded a reduction in greenhouse gas intensity of more than 90%. Honeywell has also committed to setting a science-based target, including scope 3 emissions, with the Science Based Targets initiative (SBTi).
Honeywell also offers a range of ready-now solutions to help all organizations manage their environmental impact, including sustainable aviation fuel, advanced plastics recycling, energy storage solutions, replacing natural gas with hydrogen, and carbon and energy reduction in buildings.