Are businesses prepared for a resource constrained world?

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Source: GLOBE Foundation

The leaders of many global companies remain unprepared for the effects of dwindling natural resources, according to new research from the Carbon Trust.

The study involved 475 senior executives in Brazil, China, Korea, UK and USA. It 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 ten to 15 years at the earliest, meaning they may not have plans in place until 2025.

This pattern of inaction was found to be widespread, with 43% of the companies 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%) have not set targets for managing the reduction of carbon, water or waste.

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.'

'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,' he added.

The study also reveals a wide chasm between business-to-business and consumer-facing organizations' approaches to sustainability and when they expect to feel the impact of resource constraint.

While consumer-facing companies estimate that on average this will be in ten years time, those in 'B2B' organizations predict they will need to take action in four years. Given this split on the urgency to take action, notes the study, it is perhaps unsurprising that 54% of consumer-facing organizations surveyed do not have a sustainability program, compared to just 19% of 'B2B' companies.

A third (33%) of consumer-facing companies admit that they have no plans to introduce a sustainability program at all. As noted in the report, 'Across all organizations surveyed, it appears that sustainability is a long way off from being embedded within the boardroom. The sustainability buck stops with the board in only 4% of organizations surveyed. '

A quarter of the suvey respondents stated that no one is responsible or accountable for sustainability within their company.

The survey was conducted by telephone with 475 C-level executives from a variety of functions within a wide-ranging number of industries. Interviews were conducted during October 2012.

Download the full infographic - Are businesses sleepwalking into a resource crunch? (PDF)

See also GLOBE-Net article:'An Interview with Linda Fisher Chief Sustainability Officer, DuPont' for an indepth discussion of the importance of having a designated senior officer responsible for monitoring long term sustainability issues that could affect a company's future survival.

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