Making changes happen isn’t always quick or easy, and in the case of sustainable change, where so many established processes need to be evaluated, it can be expensive as well – the good news is that sustainability does generate real cost savings, so this initial outlay will eventually be mitigated, but knowing what sort of costs are involved is essential when planning a sustainable plan of action, and the yearly budget.
Where Do Sustainability Costs Stand on a Worldwide Scale?
In the global scheme of things, when it comes to the United Nations Sustainability Development Goals (UNSDGs), it’s estimated that the cost of meeting these targets is going to cost $195 trillion, a $20 trillion increase from their September 2022 estimate of $175 trillion; however it is believed that the cost can be cut by around 40% with technology.
The increase in the estimated cost has been attributed to under-funding, shorter time frames, surging inflation, and the rising costs of becoming net zero.
What are the Costs for Individual Businesses?
Generally, creating sustainable products does come with a higher cost compared to traditional methods, because of raw materials or processing methods being more expensive, or batch sizes being limited.
However, this increase in cost can often be mitigated by increased prices to the end consumer with 66% of U.S. consumers willing to pay more for sustainable products, and this is often a popular way of recouping the costs with green products often being 75 – 85% more expensive than conventional products.
But turning products green isn’t the main issue for most businesses, it’s updating existing locations, processes, and installing the technologies or changes required to meet sustainability targets.
It has been estimated that enterprises are likely to spend around $158 billion on Environmental, Social, Governance (ESG) for business services, with a five-year Compound Annual Growth Rate (CAGR) of 32.3%
Improvements in the infrastructure of buildings and processing plants isn’t particularly cheap, but there are grants and financial assistance available, such as the EPA Grants, which award more than $4 billion on an annual basis.