The leaders of listed 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.
This could be related to the fact that a half (47%) of
executives believe that acting on sustainability issues such as
these decreases profits - and only 13% of board directors are
remunerated for achieving sustainability metrics.
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.
Tom Delay, Chief Executive, Carbon Trust, says, "The research
shows that many organisations 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 organisations 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."
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.
Delay continues, "UK listed companies are better placed than
most for the upcoming resource crunch - could this mean that
despite the current shift in the world economic order the UK will
gain commercial opportunities as competitors in other markets
struggle to cope in a resource-constrained world?"
The study also reveals a wide chasm between business-to-business
and consumer-facing organisations' 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" organisations predict
they will need to take action in four years. Given this split on
the urgency to take action, it is perhaps unsurprising that 54% of
consumer-facing organisations surveyed do not have a sustainability
programme, compared to just 19% of "B2B" companies. A third
(33%) of consumer-facing companies admit that they have no plans to
introduce a sustainability programme at all.
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.
Download
the full infographic - Are businesses sleepwalking into a resource
crunch? (PDF)
Notes to editors
Methodology
Vanson Bourne conducted the survey 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.
About the Carbon Trust
The Carbon Trust is an independent company with a mission to
accelerate the move to a low carbon economy.
It advises businesses, governments and the public sector on
their opportunities in a sustainable, low carbon world.
It measures and certifies the environmental footprint of
organisations, supply chains and products.
It helps develop and deploy low carbon technologies and
solutions, from energy efficiency to renewable power.
About Vanson Bourne
Vanson Bourne, a specialist research-led consultancy, carries
out quantifiable user research delivering robust and credible
research-based analysis. The company interviews senior decision
makers from a variety of functions, across a whole range of
industries, in organisations from the smallest to the largest, in
markets around the globe. Vanson Bourne's clients range from
start-ups to well-known companies.