According to the new report released by the United Nations Environment Program, climate change and global changes in the environment will have drastic effects on how the private sector will do business.
The report, titled “GEO-5 for Business: Impacts of a Changing Environment on the Corporate Sector,” predicts that global environment trends today are creating new risks and opportunities for companies in the future. Global environment trends such as extreme weather events, increasing demand on limited natural resources, as well as climate change can affect operating costs, markets for products, availability of raw materials, and business reputation.
“Understanding environmental trends is of critical importance to business leaders. Just as social, economic, market, and technological trends – and company responses to those trends – influence the success of business, so too do environmental trends,” according to the report.
Findings of the report suggest that with the greenhouse gas emissions projected to double in the next 50 years, a temperature increase of 3 degrees Celsius to 6 degrees C by the end of the century is inevitable. For the business sector, this means that there will be a market shift that will favor lower-carbon products, while shifting production and transportation patterns to adapt to local conditions. Prices of energy, food, and certain types of commodities will also be on the rise as a result of increased greenhouse gas emissions.
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When it comes to waste management, it is projected that the world will produce 20 to 50 million tonnes of waste yearly, majority of which will come in the form of electronic waste. For businesses, there will be a growing market opportunity in recovering, reusing, or recycling of e-waste.
It is also predicted that with the increased prices of building and construction materials and fossil fuel in the future, there will be an increased demand for sustainable infrastructure, energy efficient buildings and technologies, and renewable energy technologies.
As for policies, climate change will cause businesses to push for regulatory measures focusing on green building practices and technologies, as well as reduced energy use and G.H.G. emissions. On the government’s side, policies that set energy efficiency codes, on-site renewable energy technologies, public procurement sustainability policies, and policies that are designed to reduce G.H.G. emissions are expected to be enacted.
The business sector will also be greatly affected by regulatory measures such as the United States’ Clean Air Act and Montreal Protocol which will ban the use of certain chemicals that produce G.H.G.s.
The report concludes that with the environmental landscape changing, so too will the business landscape. It is up to business leaders to take advantage of the opportunities and to take into consideration the risks of the changing environment.
“Companies that face up to these realities are likely to be the ones that thrive and remain competitive in a rapidly changing world where factors such as climate change and dwindling availability of natural resource like water will shape future profit and loss and drive new markets,” said the U.N. Under Secretary-General and U.N.E.P. Executive Director Achim Steiner. – EcoSeed Staff
