Leading entrepreneurs view climate change as a growing strategic concern according to a survey conducted as part of Ernst & Young’s second annual Global cleantech insights and trends report, which provides insights into global trends in cleantech investment, financing patterns and public policy. Entrepreneurs were selected from Ernst & Young’s prestigious World Entrepreneur Of The Year Academy to give their views on climate change. A significant majority of entrepreneurs surveyed (61%) view climate change as an important strategic concern, while 70% have increased their focus on climate change initiatives over the past 12 to 24 months. The survey has been launched to coincide with Global Entrepreneurship Week’s Clean and Green Day (20 November).

In line with broader corporate trends, 80% expect to increase their cleantech spend over the next five years: namely to improve their internal operations and supply chain, and to meet their corporate responsibility requirements. Nearly half (44%) have budgeted at least US$1 million for climate change investments over the next five years and 6% anticipate spending upwards of US$20 million during the same period. Cleantech investment priorities are water efficiency, solar power and electric grid management.

Entrepreneurs recognize that responding to climate change can lead to strategic opportunities to enhance their market position or create efficiencies. Sixty-seven percent cite the opportunity to enhance competitive position as an important strategic driver. Other key opportunities identified include contributing to a wider climate change solution (65%), brand enhancement (63%), gaining customers (61%) and enhancing efficiency (56%).

In terms of climate change-related risks, the cost of energy and other resources was identified as an important risk by the largest number of entrepreneurs (55%), closely followed by a “greening” customer base (54%), energy reliability issues (44%) and operational efficiency/continuity (43%). When asked to identify the single greatest challenge in responding effectively to climate change, the greatest number of respondents (28%) said regulatory uncertainty.

Gil Forer, Global Director, Cleantech, IPO and Venture Capital Initiatives at Ernst & Young comments: “Companies simply cannot afford to ignore climate change. Current and expected government regulation combined with consumer demand and technological innovation is catalyzing the corporate response. Climate-smart companies recognize that investing in new technologies and focusing R&D spend or partnering with customers and suppliers to create new initiatives can create significant competitive advantage - from both revenue generation and cost-cutting perspectives.”

In terms of financial return, the majority of respondents (69%) said that their response to climate change would have a positive or neutral impact on the bottom line over the next 10 years. Only 31% expected to see a net additional cost to the bottom line.

Setting a formal climate change agenda/ board involvement

Thirty-seven percent of respondents have completed or are in the process of developing a formal climate change agenda. Another 37% identified developing an agenda as a company priority. The majority have taken actions in response to climate change: 76% have identified new products and services; 74% have identified cost saving opportunities; and 74% have integrated clean technology into the supply chain.

Climate change has moved to the top of the CEO agenda at many leading companies. Of those surveyed with a climate change agenda or one in development, most (69%) kept overall responsibility for climate change response at the full board level. Respondents generally believe that their boards have a good grasp of climate change legislation and risk, and that the information their boards need is largely available.

Only 39% of entrepreneurs surveyed have implemented a review and measuring system to allow the board and executive management to evaluate progress toward climate change objectives. However, another 45% anticipate having measurement systems in place no later than 2012.