Businesses must drive value by reducing exposure to the 'resource crunch'

Businesses must recognise the severity of operating in a resource constrained environment and adapt their business models for future growth, according to a new report.

The report, published today by the Carbon Trust, urges businesses to "prioritise resource efficiency or risk getting left behind".

It suggests that business resource challenges such as the increasing scarcity of land, energy, water and materials are quickly intensifying, highlighting that there could be a 40% gap between available water supplies and water needs by 2030.

The report also suggests that some critical materials could be in short supply as soon as 2016.

According to the Carbon Trust, these challenges remain largely unaddressed, leading to disruptions to supply, growing regulatory requirements, volatile fluctuation of prices, and ultimately, threatening the viability of existing business models.

In contrast, the companies that adapt their business models through assessing their exposure to such resource constraints can identify how to manage these risks and exploit commercial opportunities.

Carbon Trust chief executive Tom Delay, said: "Our report clearly shows that businesses which proactively put sustainability inside their operations have the potential to drive business value by reducing exposure to the resource crunch.

"To protect our economy, our environment, and the resources available to future generations, we need today's businesses to recognise the severity of these threats and to adapt their business models for future growth," he added.

The report also highlights best practice, pointing out major UK companies BT and Whitbread as businesses proactively assessing their exposure to resource constraints.

It finds that these organisations are bringing bottom line improvements through efficiency gains, and are also expected to have long term advantages far outweighing the more immediate costs.

BT Group CEO Gavin Patterson said "doing less environmental damage is no longer enough", and adding that BT is "moving beyond simply making our own business more resource-efficient", to showing how its communication technology products and services can create a "better future for our customers, suppliers, and our planet."

Whitbread head of energy and environment Chris George, said: "As consumers become more discerning it's not enough to do the bare minimum when it comes to sustainability. We see our sustainability strategy as an opportunity, not a compliance exercise, both in terms of future revenue growth and protecting existing value.

George added that the consumer of 2014 is as likely to identify water, waste and depleting resources as carbon when talking about sustainability, and therefore a comprehensive understanding of and engagement with all of these issues should be a crucial part of any business's core strategy.

Commenting on the work carried out by the two major firms, Delay said: "These companies have successfully demonstrated the inherent ability to internalise business risks and develop creative ways to address them, to secure future business value.

"In doing so, they have set themselves apart from their competitors. Whatever the sector, there are sustainability actions that present tremendous commercial opportunities for business leaders thinking beyond short-term gains and looking to truly establish a sustainable business model," added Delay.

Leigh Stringer


| sustainable business | resource security


Energy efficiency & low-carbon
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