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Sustainable Business Market Sizing & Forecasting: Critical MomentsĀ® Methodology Report

Date: 16 January 2012

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EXECUTIVE SUMMARY

Quantifying sustainable business spending is a challenge. The true nature of spending patterns is obscured by the involvement of many functions, dispersed responsibility, spending embedded in business-as-usual activities and ‘green’ corporate marketing. The proprietary Verdantix Critical Moments model provides sustainability leaders with a framework to benchmark their spending and a detailed market sizing and forecasting model to understand the size, shape and future direction of spending on sustainability initiatives. The analysis is based on financial data, sustainability maturity assessments, a detailed initiatives map as well as change drivers such as oil prices, carbon prices, innovation and risk factors. Critical Moments reports help corporate leaders to benchmark their budgets, raise additional funds, improve sales and marketing strategy, and validate business plans. This report explains the Critical Moments methodology and should be read in conjunction with Critical Moments data reports. The report concludes with sample insights using data from the Verdantix UK Sustainable Business Spend 2010-2015 report.

TABLE OF CONTENTS

CRITICAL MOMENTS QUANTIFIES SUSTAINABILITY BUDGETS
Quantifying Spend On Sustainable Business Is A Challenge
Definitions And Rules Define The Scope Of Sustainable Business Spend
Detailed Sustainable Business Budget Analysis Defines Market Size

CRITICAL MOMENTS FORECASTS SUSTAINABILITY SPENDING
Economic Forecasts Include The Impact Of The Business Cycle
Energy And Carbon Price Sensitivities Impact Sustainability Decisions
Regulations Trigger Fluctuations In Spending On Sustainability
Competitive Dynamics Impact Sustainable Business Spending In Each Industry

HOW TO BENEFIT FROM CRITICAL MOMENTS INSIGHTS
Justify Additional Funds By Benchmarking Sustainability Budget
Turbocharge Sales And Marketing Plans With Quantitative Market Data
Create Scenarios For Strategy Development And Business Planning

EXAMPLE OUTPUTS FROM CRITICAL MOMENTS DATA ANALYSIS

TABLE OF FIGURES

Figure 1. Critical Moments® Scope: Sustainable Business Spending
Figure 2. Firm-Level Maturity Assessments Define Three Levels Of Sustainability Spend
Figure 3. Sustainable Business Initiatives Define The Budget
Figure 4. Example: Spend As A % Of Revenue By Leaders, Opportunists & Laggards
Figure 5. Industry Definitions
Figure 6. Critical Moments® Divides Initiative-Level Spend Into Five Categories
Figure 7. A Variety Of Forecast Drivers Impact Sustainable Business Spend
Figure 8. Critical Moments® Supports Budgeting, Marketing Plans And Business Strategy
Figure 9. Benchmark Sustainability Budgets
Figure 10. Enhance Sales Productivity By Targeting Large, Profitable Segments
Figure 11. Size And Select The Most Promising Markets
Figure 12. Validate Business Plans With Custom-Built Sustainability Scenarios
Figure 13. Market Opportunity Forecast By Industry
Figure 14. Sustainable Business Market Opportunity Snapshot By Industry
Figure 15. Spend By Category
Figure 16. Average Spend Per Firm By Industry On One Category Of Spend
Figure 17. Market Opportunity Forecast By Initiative Group
Figure 18. Spend Forecast For Initiative Group
Figure 19. Growth Forecast For Category Of Spend By Industry
Figure 20. Change In The Mix Of Spend By Category
Figure 21. Spend Forecast And Year-On Year Growth Rates For A Single Initiative
Figure 22. Spend Per Firm On A Single Initiative By Industry

ORGANIZATIONS MENTIONED

Alcatel-Lucent, Allianz, Blackfriars Group, BP, Cosan, Dean Foods, Deloitte, Dow Jones, EDF, Energias de Portugal, FTSE, GE, Orange, Pacific Gas & Electric, PwC, RWE, Sainsbury’s, Shell, Tesco, Timberland, Virgin Atlantic, Wal-Mart