Publication date: February 2014
This report examines 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.
This report profiles four Carbon Trust customers taking leading action on sustainability - Whitbread, BT, Stagecoach, and Bord Bia - and illustrates how they are rising to the challenge. 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.
Organisations profiled in the report 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