The Carbon Trust today launches a new report examining the need for businesses to urgently assess their exposure to resource challenges in order to future proof their business models in today’s resource-constrained world.
Business resource challenges such as the increasing scarcity of land, energy, water and materials are quickly intensifying. For example, there could be a 40% gap between available water supplies and water needs by 2030, and some critical materials could be in short supply as soon as 2016. 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.
Conversely, businesses that adapt their business models through assessing their exposure to such resource constraints can identify how to manage these risks and exploit commercial opportunities. In turn this will improve efficiency, strengthen long-term resilience, and drive business returns.
For example, there has been extensive analysis of the returns from energy efficiency, which provide a compelling business case for investment. Carbon Trust analysis of energy efficiency measures identified in over 2,000 organisations showed an average internal rate of return of over 40%, which compares with 10-15% returns from ‘typical’ business investments.
Tom Delay, Chief Executive at the Carbon Trust, 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.”
Some of the UK’s leading companies, such as BT and Whitbread, are already working with the Carbon Trust to proactively assess their exposure to resource constraints. The report 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.
Furthermore, the report analyses the key drivers currently motivating these businesses to become more resource efficient, including competitive differentiation, industry leadership and delivery of savings and new growth opportunities, for example, creating new products that meet evolving consumer demands.
These organisations include:
- Bord Bia, which is helping farmers in Ireland identify actions that deliver financial and environmental improvements and maintain the industry’s leading position in Europe
- Whitbread, which through identifying new opportunities for sustainable growth in the business, gained the confidence to invest £4m p.a. in energy and resource efficiency
- Stagecoach, which, through its focus on sustainability and resource efficiency has decreased its carbon intensity by 30% for each pound of turnover in 2012/13, compared to a 2007/08 base case
- BT, which help its customers reduce carbon emissions by at least three times the end-to-end impact of its business, and also drive energy efficiency and carbon reduction throughout the supply chain
Gavin Patterson, Chief Executive Officer at BT Group, said:
“Proud as we are of our own record, doing less environmental damage is no longer enough. At BT we are moving beyond simply making our own business more resource-efficient, to really showing how our communication technology products, services, and expertise can create a better future for our customers, suppliers, and our planet.”
Chris George, Head of Energy and Environment at Whitbread, 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. The consumer of 2014 is as likely to identify water, waste and depleting resources as carbon when talking about sustainability. A comprehensive understanding of and engagement with all of these issues should therefore be a crucial part of any business’s core strategy and this is a prime reason why Whitbread has been motivated to work with the Carbon Trust to understand our impact, set meaningful targets, and take action to become more sustainable. This has resulted in us being one of the first companies to achieve all three Carbon Trust Standards for carbon, water, and waste reduction.”
Tom Delay concludes:
“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.”
Notes to Editors
About the Carbon Trust:
The Carbon Trust is an independent company with a mission to accelerate the move to a sustainable, low carbon economy.
The Carbon Trust:
- advises businesses, governments and the public sector on opportunities in a sustainable, low carbon world
- measures and certifies the environmental footprint of organisations, products and services
- helps develop and deploy low carbon technologies and solutions, from energy efficiency to renewable power
View the full report: "Opportunities in a resource constrained world - how business is rising to the challenge"
For further information on the Carbon Trust, please contact the Carbon Trust press office on 020 7170 7050 or email@example.com.