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87% of business leaders expect to increase sustainability investment in short-term
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87% of business leaders expect to increase their organization’s investment in sustainability over the next two years. Customers are the primary stakeholder group creating pressure for organizations to invest or act on sustainability issues, selected by 80% of executives, followed by investors (60%) and regulators (55%).

“Sustainability enables businesses to cope with disruption,” said Kristin Moyer, Distinguished VP Analyst, Gartner, which carried out the research. “Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all forms of expenditure. This focus on essentialism, in combination with increasing stakeholder desire to see progress on environmental, social and governance (ESG) goals, creates new opportunities for enterprises to grow while mitigating cost and risk.”

The survey was conducted in June and July 2022 among 221 respondents in North America, Europe and Asia/Pacific. Respondents were executives in director roles or above within organizations with enterprise-wide annual revenue of at least $250 million for fiscal year 2021, which are currently engaged in sustainability-related activities.

Sustainability Protects Organizations from Disruption

The survey found that 86% of business leaders see sustainability as an investment which protects their organization from disruption. Additionally, 83% said sustainability program activities directly created both short- and long-term value for their organization, and 80% indicated that sustainability helped their organization optimize and reduce costs.

Specifically, the top areas where survey respondents said sustainability programs are mitigating cost increases are energy consumption, business travel and customer transactions (see Figure 1).

Fig. 1. Top Operations-Related Costs Being Mitigated Through Sustainability Programs

Source: Gartner (November 2022)

“Executive leaders are achieving both operational and supply chain savings through their sustainability programs,” said Moyer. “This kind of ‘two for one,’ where sustainability investment supports a business goal like cost optimization, significantly enhances the program’s impact by creating a virtuous cycle.”

Sustainability Drives Growth and Innovation

Sustainability can also enable new value creation and business growth opportunities. Fifty-seven percent of business leaders said the enterprise sustainability program has a strong connection to the results on the income statement, and 42% of respondents are leveraging their sustainability activities to drive innovation, differentiation and enterprise growth through sustainable products.

“Investing in sustainability can support product differentiation but be wary of greenwashing risks – there are no shortcuts to sustainable growth,” said Moyer. “Focus on product attributes that are important to customers and how these priorities shape buying decisions. When viewed through a strategic lens, sustainability can provide a ray of sunshine for businesses during difficult market conditions.”

Integrated FM market to hit $94.2bn this year
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The global integrated facility management market is expected to grow from $87.86 billion in 2021 to $94.18 billion in 2022, equivalent to a compound annual growth rate (CAGR) of 7.2%.

Furthermore, the new data from ResearchAndMarkets predicts the market will grow to $119.55 billion in 2026 at a CAGR of 6.15%.

North America was the largest region in the integrated facility management market in 2021. Asia Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the integrated facility management market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

The report says increasing development of sustainable infrastructure is driving the growth of the integrated facility management (IFM) market, due to the ‘need for enabling economic and social development, as well as environmental sustainability while preserving human fairness, variety, and natural system performance’.

The integrated facility management follows a unique process to make structural, architectural, and operational changes in buildings to reduce the negative impact on their occupants and the environment. For instance, according to The New Climate Economy, a flagship project of the Global Commission on the Economy and Climate, the world is expected to invest $90 trillion in sustainable infrastructure by 2030. These investments are crucial to boosting the economic growth in emerging markets and developing countries in addition to fighting against climate change.

Furthermore, the Organization for Economic Co-operation and Development (OCED) predicts that an annual average investment of $6.9 trillion in sustainable infrastructure is required until 2030 for global development. Both instances indicate the increased development of sustainable infrastructure globally. Hence, the increasing sustainable infrastructure development will propel the growth of the integrated facility management market.

Th report says Technological advancements such as artificial intelligence (AI) are being implemented into integrated facilities management solutions to enable optimum space management. The AI-based technologies employ computer systems to do complex activities formerly performed by humans by their functionalities such as speech recognition, visual perception, and decision making. These tools can gather, store, and analyze large data sets in seconds, enabling facility managers to be more proactive in asset performance management, and send an automatic update in case of issues.

These tools replace many monotonous and time-consuming facility management duties. Key players are focusing on offering AI-based integrated facilities management solutions to strengthen their market position. For instance, in January 2020, the American multinational technology corporation IBM incorporated artificial intelligence (AI) into its TRIRIGA solution to assist real estate and facilities management professionals in better use of office space and provide a more engaging work environment.

One of the world’s top integrated workplace management systems TRIRIGA includes TRIRIGA Building Insights, as well as integrates occupancy data from WIFI and/or IoT sensors with freshly incorporated AI. It helps firms and facility managers gain insights into how more effectively they can utilize space across their enterprises.

Global demand for healthcare FM to hit $165bn this year
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The global market for Healthcare Facilities Management is estimated to be worth $165.1 billion in the year 2022, driven by the COVID-19 pandemic, and is projected to reach $222.9 billion by 2026, equivalent to a CAGR of 7.2% over the forecast period.

The latest analysis from Dublin-based ResearchAndMarkets says Soft Services, one of the segments analysed in the report, is projected to grow at a 6.5% CAGR, while growth in the Hard Services segment is readjusted to a revised 8.3% CAGR.

Healthcare FM market worldwide continues to grow at a promising rate. With world confronting challenges in the form of rising incidence of lifestyle related diseases, focus is shifting towards health and better lifestyle that is also expected to bear an impact on the FM market. The growing focus on healthcare sector is thus contributing to the increase in FM revenues.

Specifically in regions such as Europe, where governments are slashing healthcare budgets, there is growing demand for outsourced FM services. The rising threat of lifestyle diseases is also expected to foster improvements in building designs, in order to promote comfortable, productive and active lifestyles.

Increasing prevalence of chronic illnesses, rising disposable incomes of urban people, technological advancements designed to improve healthcare, rapid growth of medical tourism, and support for healthcare sector from government departments in developed and emerging economies are also supporting growth of the healthcare FM market.

The market is also benefitting from the rising expenditure on healthcare and associated infrastructure, growing focus on the aspect of hygiene, and the increasing emergence and use of technologies for maintaining sustainability. Increasing priority being given to patient wellness and safety also bodes well for the market.

Private healthcare institutions are generally more focused on implementing healthcare facility management. The growing demand for outsourced FM services remains a key growth driver for the overall healthcare FM market. The market is being driven in part by the increasing trend of hospitals and other healthcare units outsourcing facilities management.

Also driving growth are factors such as rising adoption of IoT and increasing proliferation of cloud-based solutions are expected to open up new avenues of growth in the healthcare FM market. Latest technologies such as Internet of Things (IoT) and automated guided vehicles, among others enable the providers of such services to offer improved customer service. IoT provides a steady flow of data in real-time, which allows better decision making and optimization of processes.

Automation is also increasingly being witnessed in energy management systems of hospitals. IoT and AI support energy flow and its optimization in healthcare facilities. There has also been the emergence of several smart products due to the growing IoT adoption. Smart technology can be used to improve door locks, HVAC, alarms, and security cameras, among others, and facilitates the use of mobile devices to control them, which makes remote management of a facility possible and less time-taking.

Another factor fostering market growth is the rising use of healthcare facility management software, which enables clinics and hospitals to perform routine operations smoothly and enhance patient care. It allows healthcare facilities to use their physical resources and perform automation of management functions.

Facilities management services are of two broad types, soft services and hard services. Hard facility management services refer to those that are integrated into facility or building. These are vital to the workplace environment and cannot be removed. Hard services are known to impact all people in the facility, albeit at different levels. Heating, lighting/electrical, plumbing, fire safety systems, air conditioning, and mechanical are some types of hard services.

Soft services category, especially cleaning and pest control segments, accounts for a major share and is likely to grow at a healthy rate driven by the growing importance of maintain clean environments given the highly contaminated surroundings of various healthcare facilities. The cleaning and pest control segment has considerable importance in the healthcare FM market, due to the high degree of contamination in healthcare settings.

Medical waste management is expected to register strong growth in the forthcoming years. Healthcare facilities produce a significant quantity of non-hazardous and hazardous waste on a daily basis that arises from the diagnosis and treatment of diseases. Such waste needs to be carefully and safely managed to prevent the spread of infections and diseases and to lower impact on the environment.

Food waste impacting Net Zero ambitions
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Unprecedented pressure on supply chains has led to food buyers in the UK’s biggest organisations reporting a 60% increase in food waste over the last six months.

This surge casts doubt on the food industry’s ability to meet the UN’s Sustainable Development Goal to reduce food waste by 50% by 2030, and hampers progress to net zero.

This is according to a new study commissioned by Sodexo UK & Ireland evaluating how large organisations are navigating the current supply chain crisis and its impact on food waste and carbon emissions. It found 83% of respondents say they have created a more resilient supply chain after the pandemic; however, food waste is increasing for a majority of companies.

Sodexo’s research shows that to increase their resilience, UK food supply chain heads are increasingly diversifying their supplier base by working with smaller suppliers, with over a third (38%) doing so. 35% are also looking to source more food domestically.

SMEs form the backbone of this approach with 81% saying the current supply chain crisis has emphasised the need to source more from SMEs. Some suppliers are eager to collaborate further, with 38% agreeing that the sharing of best practice with SME partners in the supply chain to improve efficiencies will best help address the UK’s supply chain challenges.

Commenting on the findings Aoife Wycherley, Head of Supply Chain & Food Procurement at Sodexo UK & Ireleand, said: “Diversifying the food supply chain is essential for building resilience. SMEs can enable greater agility because they’re more flexible, innovative and, tend to drive domestic food sourcing which, in turn, can reduce carbon by cutting down on air and freight usage. This makes having SMEs in the supply chain essential for those that need to maintain supply and meet climate targets.”

Carbon data reporting is, however, a huge burden for small businesses, and we need greater industry collaboration from large organisations to support them with this challenge in order to achieve net zero in the supply chain.

The findings come as Sodexo continues its work with SMEs. These account for three-quarters of its supply chain and for 44% of its spend, enhancing its resilience to continue delivering meals to customers, despite the external market shocks the industry is facing.

Reducing food waste is a critical part of minimising carbon emissions in the supply chain. Despite this, over one third (35%) of respondents admit to deprioritising food waste due to the ongoing challenges in the supply chain over the past year. A similar proportion (34%), however, do support the introduction of mandatory food waste reporting which is proposed in the Government’s recently published food strategy.

Claire Atkins-Morris, Director of Corporate Responsibility at Sodexo UK & Ireland, said: We welcome the Government’s decision to consult on mandatory food waste reporting, something which we’ve been calling for in our Appetite for Action campaign. The first step towards cutting food waste is tracking and monitoring. More broadly, we urge government to take a holistic approach to all areas which will determine the success of net zero policy making, including food waste, carbon reduction and supply chain resilience. The strategy must be broader than focusing on renewable energy and the introduction of electric vehicles.”

Sodexo, which has pledged to cut its own food waste by 50% by 2025 and achieve net zero by 2045 – found that achieving net zero emissions has become the most important priority for 80% of respondents. Sodexo reduced its greenhouse gas emissions by 38.5% in FY21, (against a 2017 baseline measurement of 1.16million tonnes of carbon) across Scopes 1, 2 and 3 which includes emissions from the supply chain. The research also found two-fifths (40%) of food supply chain heads are calling on businesses to adopt net zero policies to future proof a supply chain adhering to science.

Sodexo partnered with WRAP last year in support of the first ever Food Waste Action Week to tackle food waste and help save the planet. Sodexo is also a signatory of The Courtauld Commitment 2030, a voluntary agreement that enables collaborative action across the entire UK food chain to deliver farm-to-fork reductions in food waste.

Keith James, Head of Policy and Insights, WRAP, added: “Through Courtauld 2030, WRAP has partnered with Sodexo to tackle climate change, food waste and water stewardship. Sodexo’s findings relating to a rise in self-reported food waste are worrying, but not unexpected given the pressures put on supply chains in recent years. WRAP will publish data later this year to show where the UK is in terms of tackling food waste, GHG emissions connected with our food and drink, and water stewardship. Every business can make a difference by instigating the Target-Measure-Act approach, but not all have the flexibility to adopt strategies quickly with competing pressures. That is why WRAP published new Scope 3 protocols for measuring GHG emissions linked to the food we make, sell and eat.”

Workers want their managers to have leadership skills
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New research by LMS provider Digits into skills in the workplace has revealed a list of the most important skills that workers expect a manager to possess, with leadership right at the top of what they want.

Around half (51% of men and 45% of women) of the 2,048 working-age adults polled thought leadership skills were the most essential.

Verbal communication and teamwork skills ranked joint second for over a third (35%) of people, closely followed by empathy and problem-solving skills (30% and 29% respectively).

Surprisingly, written communication skills came last on the list (8%) – proving to be less popular than a strong work ethic (21%), good time management (18%), and conflict resolution (15%).

Just one in 10 of those surveyed reported having no specific skill requirements of a manager, suggesting that most people do have pre-existing ideas around what makes a good or competent manager to them. Whether their actual managers meet their expectations, on the other hand, is a matter for another survey.

The most important skills needed by managers, ranked by popularity, are:

  • Leadership skills (48%)
  • Verbal communication skills (35%)
  • Teamwork skills (35%)
  • Empathy (30%)
  • Problem-solving skills (29%)
  • A strong work ethic (21%)
  • Good time management (18%)
  • Conflict resolution (15%)
  • Written communication skills (8%)

Of course, ‘leadership skills’ is an umbrella term that can mean different things to many people. And it can encompass a range of hard skills (job-related knowledge) and soft skills – transferable skills that help individuals work and interact with others – such as adaptability, flexibility, communication, teamwork, time management and problem-solving.

There is no one-size-fits-all, explains Bradley Burgoyne, head of talent at Digits: “We’ve got more generations in the workforce today than we’ve ever had. And, each group of workers prefers slightly different managerial styles and leadership qualities.

“Every individual has their own expectations about how they want their managers to lead them, coach them, support them, relate to them, and empower them. Those skills don’t just happen, even the best managers need to receive regular training and development from their employers.”

He adds: “The challenge for HR and L&D teams is to ensure that their training strategy is broad enough to cater to all levels of employees in the organisation because, I think, everyone benefits from leadership or management development.

“It’s important that employers actively listen to their workforce and find out where the skills gaps are – what training do employees think they need? What training do employees think their managers need and what leadership qualities do they respond best to? They can then utilise the data to create training courses or a series of engaging development activities in their learning management system, that are really relevant to the people within the organisation rather than something that could, potentially, be seen as just a tick-box exercise.”

According to Burgoyne, some of the core leadership skills of a modern manager include:

  • Vision setting – having clear business goals for the team and being able to influence and gain buy-in from team members to work towards that vision. This also includes some change management skills, as setting a vision and taking a team on a journey to reach it, inevitably involves helping people work through change.
  • Empathy and listening – builds trust and connection between individuals and their managers. Managers need to be mindful and show their team that they understand and relate to them as human beings, that they recognise that each person has different needs, different skills, and a different perspective on how they approach different situations at work.
  • Inclusive leadership – managers that want to create a high performing team need to be able to provide high levels of psychological safety within their teams, where feedback is welcome and encouraged. An environment where everyone feels included and safe enough to provide feedback, feels that the feedback that they provide is valid, and that action will happen as a result, helps to build a team with a sense of purpose in what they’re doing and a growth mindset.
  • Coaching skills – rather than always telling people what to do, good managers trust and empower their teams to use their skills and knowledge to find the answers and achieve an outcome. A quality coaching conversation will help someone to realise that they knew the answer all along or feel empowered to go and find the answer. This can support an employee’s sense of purpose and self-validation and create a far more autonomous team.
  • Self-awareness – to lead others successfully requires managers to reflect inwards and understand their management style and learn how to adapt it for different situations. There are multiple challenges facing managers today, many that they may not have experienced before, so it’s important to be really agile, adaptable, and constantly thinking about the wider world and how that might need to change your approach.
  • Collaboration skills – managers don’t need to have the answers to every question. The world of work is too complex and fast-moving for one person to be able to come up with all the solutions all the time. Encouraging collaboration – with other individuals, other teams and other departments – to find answers by working together or reaching a shared goal through a collaborative process, will help improve the performance of the entire organisation.

Generational divides

Further analysis of Digits’ survey results showed clear generational divides between what people at the start of their career considered to be important managerial attributes compared to those who have been in the workforce for a decade (or two). Almost twice as many people over-55 (who’ve probably experienced a few different managers during their working life) than those aged 16-to-24-years-old think leadership skills are a must-have for managers (56% vs 28%).

Although leadership skills are ranked the highest across all age groups, what comes next varies. A strong work ethic is popular with a quarter (25%) of 16 to 24 year-olds, verbal communication skills are preferred by 24 to 34 year-olds and the over-55s (36% and 44% respectively), while teamwork skills are highly rated by over a third (36%) of those aged 35 to 54 years old.

Digits’ soft skills report, including the latest soft skills training statistics for 2022, is available to view at https://www.digits.co.uk/soft-skills-statistics. The results include a survey of 2,048 people in the UK, conducted by Censuswide for Digits, in March 2022.

FM market set for £3bn sales boost in 2022
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A new report on the UK’s facilities management market from MTW Research has found that whilst the cost of Covid-19 will exceed £11 billion in lost revenue by 2026, prospects for the market are positive with a £3 billion sales uplift in 2022.

The 100 page report reviews the legacy of Covid-19, highlighting near term labour, profitability and other operational challenges but places this into context within wider positive FM market trends and opportunities, forecasting double digit growth over the next 4 years.

Proptech represents a key positive FM market trend in 2022 according to MTW, with growth in disruptive technology boosting healthy sales opportunities. Discussing this trend, MTW’s director Mark Waddy said: “Trends in FM technology and process innovation are enabling FM providers to develop an ‘empathic response’ to service provision, boosting added value by more closely integrating with the client and anticipating their needs.”

Public sector FM grew share of the FM market in 2020/21 as commercial demand slowed in response to the pandemic.  MTW identify that this trend is now reversing in 2022 though public spending plans published in March 2022 were further revised upward by 2.8%, on top of a real terms increase of £150bn announced in 2021.  This growth, coupled with a steadily strengthening private FM outsourcing sector underlines a fundamental strength in the FM market for the medium to longer term with MTW forecasting the market will reach 98% of pre-Covid sales in 2022.

Despite high inflation, real term growth is set to return in H2 2022 with full year 2023 growth expected to outpace inflation as international and domestic inflationary pressures steadily ease.  However, MTW also identify a number of issues dampening growth prospects.  One example is the trend of insourcing, with caterers, cleaners, security and maintenance contractors having become so well integrated that they are viewed as the ‘lifeblood’ of the organisation and so are adopted as employees.  This trend is often also supported by unions and so has gained further traction as a result.

The report also highlights growing challenges in the TFM market, with a growing trend of FM contractors focusing on specialism rather than broad spectrum service delivery in order to develop more defined brands and enhance margin opportunities.  More selective tender submissions and enhanced margin protection continue to become increasingly evident across the FM market in 2022 as the quality of service rather than volume of contracts grows in significance.  Nevertheless, bundled FM services continue to dominate the market in 2022, rising by more than 13% over the entire review period.

Best performing sectors in recent years according to MTW include the contract cleaning market and security sectors whilst the property maintenance and catering markets performed generally in line with the overall FM market.  By 2026, sales from these 4 sectors alone will generate more than £55 billion of sales in cash terms.

The report also identifies some of the more recent mergers and acquisitions and forecasts M&A will grow rapidly in 2022, underpinned by private equity which continues to price trade buyers out of the market.  As private equity continues to grow share of the FM market, M&A activity is set to rise by some 35% in 2022 compared to 2019 levels.

Global FM market hit $43.4 billion in 2021
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The facility management market is growing at a high CAGR because of the rising investments towards infrastructure development and increasing construction activities across different parts of the world.

That’s according to a study conducted by BlueWeave Consulting, which reveals that the global facility management market was worth $43.4 billion in 2021, and is forecast to grow at a CAGR of 12.2% to reach revenues of around $94.1 billion by 2028.

The growth is attributed to rising investment towards infrastructure development and increasing construction activities along with flourishing tourism in different parts of the world.

Furthermore, the rising adoption of advanced technologies such as cloud computing, SaaS, IoT, artificial intelligence (AI), etc., is also offering lucrative growth opportunities.

Increased Tourism

Growing tourism is emerging as the major driving factor for the growth of the facility management market across the globe, with governments, along with private players, significantly investing post-pandemic in developing commercial spaces such as hotels, public houses, restaurants, etc., along with the management of historical sites, which is fuelling the demand for facility management services.

Rising Business Collaborations and Partnerships

With the increasing potential of facility management, several players are adopting various competitive strategies to exploit the growth potential of the market. Strategies such as partnerships, mergers, collaborations, etc., are increasingly becoming common. For instance, Dexterra Group Inc. recently announced the acquisition of the privately-owned TRICOM Facility Services group of companies. This acquisition is aimed at expanding the integrated facility management business unit of the Dexterra Group.

Facility Management Market – By End-User

Based on end-user, the global facility management market is segmented into commercial and retail, manufacturing and industrial, government, infrastructure, public entities, institutional, and others. The commercial segment accounts for the largest market share owing to the rising number of commercial spaces such as offices, hospitals, hotels, airports, sports facilities, restaurants, etc., in different parts of the world. These commercial facilities are opting for in-house facility management services to comply with regulatory guidelines regarding safety and hygiene. However, the manufacturing and industrial segment are projected to witness the highest growth rate during the forecast period.

Facility Management Market – Regional Insights

Geographically, the Asia-Pacific region dominates the facility management market. However, the Middle East & Africa is also growing at a substantial rate during the forecast period. The economic diversification in Middle Eastern countries such as Saudi Arabia, Israel, Iran, Turkey, etc., and the rising establishment of commercial facilities such as offices, manufacturing plants, hotels, etc., is significantly propelling the growth of the facility management market.

Impact of COVID-19 on Facility Management Market

The facility management market was among the worst affected industries due to the COVID-19 pandemic outbreak. The rapidly escalating COVID-19 cases around the world prompted the government of various countries to impose strict lockdown and social distancing measures. This resulted in the operations of different end users industries of facility management including construction, manufacturing, retail, commercial, etc. The commercial spaces including offices, hotels, airports, etc., were forced to close to prevent the community transmission of the virus. Due to this, the demand for facility management services witnessed a significant drop during the COVID-19 period.

Competitive Landscape

According to the report, the leading market players are Archibus Inc., Trimble Navigation Ltd, Broadcom Inc., Satnav Technologies, FM System Inc., SAP SE, IBM Corporation, Planon Corporation, iOffice Corporation, Oracle Corporation, CB Richard Ellis, Veolia Environment, Colliers International, Planon Corporation, Compass Group, Cushman & Wakefield, Jones Lang LaSalle Incorporated, GDI Integrated Facility Services, Inc., EMCOR Group, Inc., and others.

Office occupiers told to expect higher fit out and servicing costs globally
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Savills analysis of Q1 22 Prime Office Costs (SPOC) in global markets around the world has shown that higher fit-out costs, reflecting material and labour cost inflation, are beginning to creep through in some office markets.

While overall there has been no movement in the position of cities in the rankings since the end of 2021, says Savills, some markets are experiencing rising costs in fitting out space and increased service charges.

According to Savills this trend is most evident in Chinese cities, Kuala Lumpur, and in North American cities at the moment, but other markets across the globe are set to follow suit in the coming quarters.

Jeremy Bates, head of EMEA occupational markets at Savills, said: “From higher prices for raw materials to increasing labour costs to keep up with rising inflation, it’s likely that most office occupiers will have to pay more to rent and fit-out their space in global cities this year.

“Whilst rent is the usual indicator of increasing cost, service charge rises and higher capital expenditure will represent the largest contributions towards increased occupier costs in the coming quarters. Even in markets where landlords tend to pay for fit-outs, these costs will eventually be passed on to occupiers later in the form of higher rents. Nonetheless, for many office occupiers the expense is unlikely to deter them from selecting top quality spaces in prime central business districts to attract and retain talent, although they are carrying out extensive data gathering exercises on how employees are using space before making decisions on exactly how much to take.”

Savills says that overall headline rents have, on average, remained flat in local currencies and the increasing additional costs have yet to appear across many markets, according to the international real estate advisor, with fluctuating exchange rates due to increased uncertainty producing the appearance of declining costs for many markets in Dollar terms during the first quarter of 2022, while in local currencies they have broadly remained consistent with Q4 2021.

Read the Q1 2022 edition of Savills Prime Office Costs (SPOC)

Renewable Energy

Renewables drove global power additions in 2021
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The International Renewable Energy Agency (IRENA) says renewable energy continued to grow and gain momentum despite global uncertainties. By the end of 2021, global renewable generation capacity amounted to 3,064 Gigawatt (GW), increasing the stock of renewable power by 9.1 per cent.

Although hydropower accounted for the largest share of the global total renewable generation capacity with 1 230 GW, IRENA’s Renewable Capacity Statistics 2022 shows that solar and wind continued to dominate new generating capacity. Together, both technologies contributed 88 per cent to the share of all new renewable capacity in 2021. Solar capacity led with 19 per cent increase, followed by wind energy, which increased its generating capacity by 13 per cent.

IRENA Director-General, Francesco La Camera said: “This continued progress is another testament of renewable energy’s resilience. Its strong performance last year represents more opportunities for countries to reap renewables’ multiple socio-economic benefits. However, despite the encouraging global trend, our new World Energy Transitions Outlook shows that the energy transition is far from being fast or widespread enough to avert the dire consequences of climate change.”

“Our current energy crisis also adds to the evidence that the world can no longer rely on fossil fuels to meet its energy demand. Money directed to fossil fuel power plants yields unrewarding results, both for the survival of a nation and the planet. Renewable power should become the norm across the globe. We must mobilise the political will to accelerate the 1.5°C pathway.”

To achieve climate goals, renewables must grow at a faster pace than energy demand. However, many countries have not reached this point yet, despite significantly increasing the use of renewables for electricity generation.

Sixty per cent of the new capacity in 2021 was added in Asia, resulting in a total of 1.46 Terawatt (TW) of renewable capacity by 2021. China was the biggest contributor, adding 121 GW to the continent’s new capacity. Europe and North America—led by the USA—took second and third places respectively, with the former adding 39 GW, and the latter 38 GW. Renewable energy capacity grew by 3.9 per cent in Africa and 3.3 per cent in Central America and the Caribbean. Despite representing steady growth, the pace in both regions is much slower than the global average, indicating the need for stronger international cooperation to optimise electricity markets and drive massive investments in those regions.

Highlights by technology:

  • Hydropower: Growth in hydro increased steadily in 2021 with the commissioning of several large projects delayed through 2021.
  • Wind energy: Wind expansion continued at a lower rate in 2021 compared to 2020 (+93 GW compared to +111 GW last year).
  • Solar energy: With an increase in new capacity in all major world regions in previous years, total global solar capacity has now outgrown wind energy capacity.
  • Bioenergy: Net capacity expansion increased in 2021 (+10.3 GW compared to +9.1 GW in 2020).
  • Geothermal energy: Geothermal capacity had an exceptional growth in 2021, with 1.6 GW added.
  • Off-grid electricity: Off-grid capacity grew by 466 MW in 2021 (+4%) to reach 11.2 GW.

Please read the full Renewable Capacity Statistics 2022 including the highlights, here.

Three quarters of UK businesses unaware of Plastic Packaging Tax
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Research conducted by YouGov, on behalf of Veolia, explored the views of British-based senior decision makers across retail and manufacturing businesses on the incoming Plastic Packaging Tax.

The tax places a £200 per tonne levy on producers or importers of plastic packaging if they do not include 30% recycled content and will come into force from 1 April 2022.

The survey found that only a fifth (22%) of the manufacturing and retail businesses asked had already opted for recycled content in their packaging. To reach the UK’s Net Zero goals, far more businesses must reduce their reliance on virgin materials. The majority of British retail and manufacturing businesses also support an escalator in percentage of recycled content threshold (63%) and cost charge (50%) as an incentive to use recycled content.

The British retail and manufacturing businesses who had made changes to their plastic packaging reported:

  • Two thirds (66%) have reduced the amount of unnecessary or avoidable plastic packaging
  • Over half (58%) now use recycled content
  • 54% have changed the packaging design to make it more recyclable
  • 39% have chosen alternative materials to plastic for their packaging

“The UK’s Plastic Packaging Tax is the right way to start getting businesses to push sustainability up the agenda, but it needs to go further. A tax escalator would make choosing to incorporate recycled content in packaging both economically and environmentally preferable to using virgin materials,” said Gavin Graveson, Veolia’s Northern Europe Zone Senior EVP. “Not only could the UK save up to 2.89 million tonnes of carbon emissions every year if all plastic packaging included 30% recycled content, it would also incentivise investment in domestic infrastructure which could make the UK a world leader in plastics recycling.”