Honeywell Launches Environmental Sustainability Index Showing Sustainability Leaders’ Sentiment
- First multi-industry and multi-regional index points to corporate confidence about past progress, but less optimism about short- and long-term future goals
- Nearly nine out of ten organizations are planning to increase sustainability budgets for the coming twelve months
- Respondents reveal near-term climate efforts revolve around process and behavioral changes across the organization, with less emphasis on technological integrations
Honeywell (NASDAQ: HON), a global leader in energy and climate transition solutions, today announced the launch of its Environmental Sustainability Index. The index is the first quarterly indicator of key trends pertaining to global efforts in climate change mitigation and other sustainability initiatives. Two-thirds of the S&P 500 have set emission reduction targets of some kind, according to an August report from Harvard Business Review.
In its first of a quarterly series, Honeywell’s new index is tracking sentiment data on corporate climate priorities and approaches to environmental sustainability. The global study surveying over 600 business leaders who are involved in the sustainability process revealed that 90% of respondents are generally optimistic about overall success with prior twelve-month goals across sustainability categories including energy evolution and efficiency, emissions reduction, pollution prevention and circularity/recycling. However, forward-looking perceptions are less confident, with just 67% of respondents being optimistic about achieving goals for the coming twelve months. Additionally, only 63% are optimistic about achieving their goals by 2030, an anchor deadline year for numerous commitments.
“At Honeywell, we have the privilege of serving customers around the world in every sector and industry,” said Darius Adamczyk, chairman and CEO of Honeywell. “In 2021, over sixty percent of our annual revenue was from solutions that contribute to ESG-oriented outcomes, and approximately 60% of our R&D spend was directed towards ESG-oriented innovation.1 This gives us a unique position to help our customers and the world solve their biggest climate and environmental challenges, so that they can reach their targets by – or before – their committed deadlines. Our position also makes us an authority on monitoring sustainability trends progress across the market, which we’re sharing with the world through the Honeywell Environmental Sustainability Index.”
More key highlights from the study include:
- Approximately 97% of organizations plan to increase current year budgets in at least one sustainability category with nearly three quarters planning to increase current year budgets in all four categories and just over a third expecting to increase budgets by over 50% in at least one category.
- Respondents indicated prioritization, progress and optimism in reaching goals across four sustainability categories: energy evolution and efficiency, emissions reduction, pollution prevention and circularity/recycling. Improving energy evolution and efficiency was the top priority across all geographies, with 73% of respondents noting it as first or second priority. The lowest prioritization was given to circularity/recycling, with only 28% of respondents noting it as first or second in importance.
- On average across all four sustainability categories, 62% of respondents noted they will achieve their goals for the next twelve months primarily by modifying or eliminating operational processes or business behaviors. Alternatively, only 16% noted they will achieve their near-term goals primarily through technology-driven changes such as upgrading or replacing existing systems with newer, more efficient or more sustainable technologies.
“As environmental sustainability efforts take center stage, we were incredibly pleased to have the opportunity to partner with a global leader like Honeywell in developing a data driven index that can serve as a bellwether for tracking the sentiment, adoption, and intent of companies around the world in reducing their carbon footprint,” said Daniel Newman, principal analyst and founding partner of Futurum Research. “Over the next decade, we expect Sustainability to be further prioritized through not only policy, but increased investment by the world’s leading companies to demonstrate the importance of sustainable practices, becoming a mandate from consumers, investors, and company boards around the world.”
“It is promising to see energy evolution and efficiency high on ESG managers’ agendas. This is an area that often results in the highest ROI, because the more efficient your operations, the less you pay in energy costs,” said Evan van Hook, chief sustainability officer of Honeywell. “When it comes to making progress, the market is bifurcated. On one hand, you have companies that need help kickstarting their sustainability journey, and others that have relied on process changes and now need deep expertise in how to attack tougher problems. No matter companies’ maturity, the real opportunity lies in leapfrogging into a technology-driven approach to sustainability. This will help make faster progress.”
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).
To download the full index and survey report, please visit http://www.honeywell.com/us/en/company/sustainability/environmental-sustainability-index.
The Environmental Sustainability Index is based on a global double-blind survey of 653 business, technology, and sustainability professionals directly involved in the planning, strategic development, implementation, or oversight of environmental sustainability goals and initiatives. The survey was conducted by Futurum Research, a global technology, digital innovation and market disruption-focused strategy, research, and analyst firm, during Q2 & Q3 of 2022. Additionally, survey panelists were required to be in a leadership role within their organization, with organizations required to have a minimum of 1,000 active employees.