LONDON--()--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 admitting 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 because 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% will deliver a less varied service or product offering.
Tom Delay, Chief Executive, Carbon Trust, says, “The research shows that many organisations are 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. 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 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, are the most likely to have a programme with targets and reporting practices in place and are 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 - 51% say they do not currently have one, compared to 13% in the UK. A key reason for this is investment - 76% of the Brazilian companies questioned state they cannot afford the investment required, compared to 31% across all countries surveyed.
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Notes to editors
Methodology
Vanson Bourne conducted the survey by telephone with 475 C-level executives (board members and those with ultimate responsibility for particular business functions) 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.