Carbon Trust

Carbon Trust

Are businesses sleepwalking into a resource crunch?


Source: Carbon Trust

New international research from the Carbon Trust shows business not prepared for global resource crunch

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 ten to 15 years at the earliest, meaning they may not have plans in place until 2025.

This inaction was found to be widespread, with 43% of organisations 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.

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

There is, however, a silver-lining for companies in the UK, who are currently best placed to deal with a resource constrained world. They spend the most on sustainability and are the most likely to have a programme with targets and reporting practices in place. They are also the most confident that there is a business case for managing and reducing carbon emissions, water and waste. Brazilian companies are the least likely to have a sustainability programme, with 51% saying they do not currently have one, compared to 13% in the UK. A key reason for this is investment, as 76% of the companies questioned in Brazil state they cannot afford the investment required, compared to 31% across all countries surveyed.

Across all organisations 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 organisations surveyed. A quarter (25%) of respondents even state that no one is responsible or accountable for sustainability within the company.

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