The world 20 years ago looked very different from today. There was no widespread use of the internet. VHS movies rather than streaming video were the norm, and few could (nor did) imagine oil costing $100 a barrel. Innovations over this timeframe, like instant global financial transactions, social networking, and virtual communications unheard of when today’s managers entered the workforce, have fundamentally changed the way that companies do business.
Looking forward, business competitiveness and leadership depends on understanding and navigating the trends that will shape tomorrow’s markets, and positioning companies to balance the risks and opportunities to come. CK Prahalad, former WRI board member and business thought leader described the process of benchmarking corporate performance against tomorrow’s emerging opportunities as ‘next practice’.
The world in 20, 30 or 40 years will look very different from today and this has fundamental consequences for business. For example, science is clear that greenhouse gas emissions reductions of 80 to 95 percent are needed by 2050 and that climate impacts are already occurring. Our children and grandchildren will be living and managing businesses in a carbon constrained world.
Decisions we make today will determine whether this transition is profitable or painful.
- How do we make business decisions around use of resources that may be increasingly expensive over the long-run? One only has to see how recent natural disasters like the 2010 wildfires and droughts that destroyed Russia’s wheat crops, or the droughts that have afflicted the US Southwest, while not necessarily linked to climate change, have impacted commodity and water prices.
- What does a near-zero carbon, climate resilient economy look like for business and where are the opportunities to develop new strategies, products, and services that capture emerging opportunities?
- Where are the opportunities to collaborate in your supply chains to capture these opportunities? What types of investments will provide long-term value? Which business models will profitably survive?
Today, WRI announces the Next Practice Collaborative with a cross-sector group of companies including Akzo Nobel, Alcoa, CEMEX, Johnson & Johnson, Siemens, Staples, and United Technologies Corporation. With input from expert advisors, the group will examine new business and finance models for low-carbon economic growth in major markets like the United States, China, Mexico, India and Brazil.
The group is exploring three inter-related themes:
- How can corporate investment decisions be aligned with long-term sustainability trends to create more value for the company?
- How do we develop new financing approaches and investment standards to ensure that buildings fit with a vision of a clean energy system?
- How can companies respond to changing consumer needs driven by climate change? The group will explore new product solutions that can enable low-carbon, climate resilient development that benefits solution providers and communities.
While the future is uncertain, participants in WRI’s Next Practice Collaborative understand that innovative strategies developed today can have long-lasting benefits for business and for the environment.
WRI and corporate partners will collaborate on developing ‘test’ cases to demonstrate the value of next practice strategies that create competitive advantage in a climate-constrained economy. The group will release its insights and lessons learned regularly along the way.