Most Companies Interested In Green Investments
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Offsetting higher energy costs
Given that around 95% of companies decided to increase the prices of their products or services, we asked a follow-up question on the extent to which they compensated for higher energy prices. Compensating for the increase in costs by passing them on to consumers appears to be an easier option than the search for cheaper production substitutes.
When raising prices of own products or services, most companies tried to compensate themselves for at least half of the higher energy costs (as noted by 60% of companies that have raised prices). On the other hand, this means that still there is a large room for price adjustments in the future.
To what extent did the companies compensate for higher energy prices by price hikes of own products or services?
We also asked a similar question about offsetting higher energy costs to 77% of entrepreneurs looking for cheaper materials and services. Around 60% of companies that take such steps could only compensate themselves for energy price increases "to a very small extent," and 34% of companies for less than half. Limited substitution possibilities could result from supply constraints due to disruptions in global value chains amid the pandemic.
To what extent did the compensate for higher energy prices by looking for cheaper materials and services
Green investments
For most companies interested in green investments, solutions aimed at saving energy or building their own RES installations are only in the planning stages. A relatively large number of companies are also in the process of modernising production lines or thermal modernisation of buildings. While investment in renewable energy sources has slowed down (with few currently in the pipeline), one in three companies interested in such investments have found a solution, appreciated its advantages and plans to expand investments in their own RES.
Reasons for lack of green investments
More than half of the companies that do not plan to invest in thermal modernisation have taken care of this beforehand. One in three companies that are not in the process of investing in their own energy sources are waiting for the availability of funds for this purpose. They also expect better solutions at the state level (e.g., the possibility of building windmills, increasing the profitability of setting up PV panels).
However, more than 40% of companies currently not investing in renewable energy sources say they may consider doing so in the future. More than half of all industrial companies would be ready to modernise production lines if there were funds to do so, with 30% currently waiting for funding from EU sources (e.g., from the National Recovery Fund).
Pressure to use energy-efficient and low-carbon solutions
In the context of the climate crisis, we also asked companies about external pressure to go green. Generally, the pressure felt by companies to use energy-saving and low- carbon solutions is low, with just one in five companies noting its effect. Greater pressure is felt by larger companies and industrial firms. This stems mainly from national and EU regulations and policies, and secondarily from local governments and residents in the vicinity of the company's headquarters. Only one in four of those perceiving pressure see it from contractors; one in four from consumers; and one in ten from banks. Pressure to act in response to the climate crisis appears to be lower in the SME sector than in large companies. This conclusion is supported by our other research at both global and national levels.
Disclaimer
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
