Businesses must adapt to remain competitive in a world with diminishing natural resources and other environmental challenges according to a report entitled ‘GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector’ released by the United Nation Environment Programme (UNEP).
“Companies that face up to these realities are likely to be the ones that thrive and remain competitive in a rapidly changing world where factors such as climate change and dwindling availability of natural resource like water will shape future profit and loss and drive new markets”, said UN Under Secretary-General and U.N.E.P. Executive Director Achim Steiner.
The report looked at the risks facing businesses from ten different sectors should they choose to continue to do business without addressing the environmental impact and implementing solid sustainability strategies.
The document cited extreme weather events and finite naturally resources as triggers for increasing operational costs and reputational risk for all companies, whilst making recommendation for specific sectors including construction, chemicals, extractive, finance and hospitality.
Steiner says, “The report speaks to the reality of climate change and natural resource scarcities… it makes the case that whether it be in water saving, or climate-proofing infrastructure, the world is going to look for solutions that in turn will drive corporate competitiveness, reputation risk and a transition to an inclusive green economy.”
The report stated that with the predicted doubling of GHG emissions in the next 50 years, the global temperature is likely to rise by between 3–6 degrees by the end of the century, and that the effects of this will hit the least prepared and the least commercially aware businesses the hardest.
In response to the ramifications of climate change, UNEP predicts that there will be a sharp increase in the sale of low-carbon products, as well as procurement departments looking to suppliers which are working sustainably throughout all areas of the organisation.
Understanding environmental trends is as critical for business as understanding the social, economic, and technological trends of the time for business strategists according to the report.
June 26th, 2013