Large businesses are optimistic about growth prospects for 2025, and most plan to increase spending on sustainability
Just under two-thirds of businesses plan to increase their sustainability spending this year, despite continued global uncertainty due to political pressures and economic challenges. In addition, 62% of large organisations say that they are optimistic about their growth prospects for 2025[i].
These are the major findings of a recent survey of 2,500 senior executives conducted by CapGemini Research Institute. The study explored business attitudes within large organisations (those with more than $1 billion in annual revenue) across 17 countries and nine industries. The report ‘Navigating Uncertainty with Confidence: Investment Priorities for 2025’ was released ahead of The World Economic Forum’s annual meeting in Davos, which is taking place this week (20th-24th January 2025).
The research found that while most business leaders (62%) are confident about their firm’s prospects in 2025 (up from 56% in 2024, and 42% in 2023), only 37% say that they are optimistic about the global operating environment in the next 12–18 months.
Businesses set to cut costs & invest in business transformation
According to this third edition of CapGemini’s report, cost reduction is a strategic objective for companies in 2025, where more than half (56%) of organisations say they will prioritise it over revenue growth this year. Yet in order to meet this objective, the researchers state that companies understand the need for investment to drive change, with over half of surveyed organisations expecting to increase their levels of investment this year. When asked where this investment will be made, almost 80% of executives said this would be in customer experience. Similarly, 74% of business leaders globally intend to increase their investments in engineering, R&D, and innovation in 2025.
However, it is supply chain transformation that will see the biggest increase in those investing, where 63% say they will boost their spending in 2025; up from less than half in 2024. The researchers explain that new-generation supply chains will integrate AI and IoT to enhance efficiency, reduce waste, and support a business’s sustainability goals, as well as improve decision-making and reduce costs overall.
Sustainability also ranks high on business agendas, where 62% of executives (up 10 percentage points from 2024) are planning to increase their sustainability budgets. Areas of priority include cleantech/ climate tech where 72% of executives plan to spend more. This includes technologies such as hydrogen, renewables, batteries, nuclear, and carbon capture. Other top areas of increased investment in sustainability are sustainable R&D and product development, biodiversity protection and restoration, and water conservation/management. A further study by CapGeminin released last September found that less than a quarter (23%) of executives said that the cost of sustainability investments outweigh the benefits, and over two thirds agree that anticipating or pre-empting stricter future regulations is a key driver of sustainability initiatives, up from 57% in 2023.
“As we look to 2025, business leaders are navigating uncertainty with an attitude of confidence and resilience – two qualities that our research shows they are looking to instil in their organisations through technology investment,” said Aiman Ezzat, Chief Executive Officer at Capgemini.
“Technology has a key role to play to improve competitiveness and productivity, while reducing costs and making all-important efficiency gains. With a focus on innovation, supply chains and sustainability – which is increasingly being harnessed for its value-driving potential – leaders will set themselves up to succeed in an uncertain environment and build resilient, adaptable organisations. Crucially, this will help shape a more innovative, sustainable and inclusive global economy.”[ii]
References
[i] Investment-Trends-Report.pdf
[ii] Business leaders more optimistic about their organization’s outlook in 2025 - Capgemini
