Businesses 'Sleep' While Resources Dwindle

MANY Companies remain unprepared for the effects of dwindling natural resources, according to new research from the Carbon Trust. 

The study, amongst 475 senior executives in Brazil, China, Korea, UK and USA, shows that many are not prepared to look at the issue of resource shortages now and believe they will not need to make significant changes in their business operations to combat resource scarcity until 2018.

Most consumer-facing companies predict that they will only need to take action within the next 10 to 15 years at the earliest, meaning they may not have plans in place until 2025. This flies in the face of what many top corporations are doing, as reported on these pages this week.

This inaction amongst many businesses was found to be widespread, with 43 percent of organizations surveyed stating that they do not monitor the risks to their business of environmentally-related shocks such as energy price rises and environmental disasters. Over a half (52 percent) have not set targets for managing the reduction of carbon, water or waste. 

This could be related to the fact that a half (47 percent) of executives believe that acting on sustainability issues such as these decreases profits - and only 13 percent of board directors are remunerated for achieving sustainability metrics.

However, when resource constraints become a reality, 60 percent of organizations think the cost of their products and services will need to increase, 55 percent that they will need to engage in fewer markets and 43 percent that they will deliver a less varied service or product offering.

Tom Delay, chief executive, Carbon Trust, says, "The research shows that many organizations are 'asleep at the wheel' when it comes to addressing sustainability and resource scarcity, doing nothing to address a problem they indicate could hit their operations by 2018. 

“Too often businesses see taking action on resource and sustainability issues as an obligation and a cost.  We know from our extensive work on carbon that good management of resources can lead to new commercial opportunities and thriving businesses. Currently, many organizations seem to accept that they will have to make significant changes to their business because of resource scarcity, and that these changes could impact their profits.  But many are sleepwalking into a resource crunch."

Download report here.

Picture of Solar Power Panels by Ceinturion at the English language Wikipedia [GFDL or CC-BY-SA-3.0], from Wikimedia Commons

Friday 14th December 2012

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