Currently, five environmental aspects could affect the world economy (Ecosystems and human well-being. Opportunities and challenges for business and industry):
1. Water scarcity
2. Climate and ecosystems change
3. Biodiversity loss
4. Over-exploiting of the oceans
5. Soil degradation
1. Water scarcity
- Water is a limited and scarce resource. In many regions of the globe, water quality is dubious. Companies use it in their production processes and if it becomes gradually depleted, or unusable because of pollution, competition for water will increase.
- Water, like any other production factor, costs money. The less there is, the more it will cost. Thus, increasing water prices translate into increasing product prices.
- Companies need to consider the water stocks when they decide to locate in a certain region. The water they use needs to be sustainably and fairly managed.
- Companies need to recycle the water and maintain it as clean as possible.
- Companies should invest in new and efficient technologies that save water and other resources, at the same time maintaining their quality.
- Companies may sell and promote water, although there is doubt about the benefits of bottled water.
2. Climate and ecosystem change
Global changes take the form of: increasing temperatures, species and ecosystem extinction, soil fertility loss and increasing rate of natural disasters. All this translates into loss of services provided by nature and will automatically lead to important consequences on the business environment.
- Companies that use and place on the market fossil energy, which is highly pollutant and in limited supply (coal, petroleum) invest in alternative energy, which is unlimited (solar, hydrogen- and wind-based) on an ever growing market. Natural gas is considered to be the resource that will make the shift from an oil-based economy to a renewable energy based one.
- Companies (machine, plastics, steel manufacturers, etc.) are investing in new, efficient and less environmentally harmful technologies.
- Being socially and environmentally responsible may mean: growth of prestige, better contracts with suppliers and customers, lower costs, improved image and innovation.
- Companies that have flexible strategies can continuously adapt to environmental change. Thus, they secure long-term profits, save jobs and encourage innovation and efficiency in production.
- Companies had better adapt quickly to social values and require rational consumption behaviours, i.e. promote resource saving, and not their depletion.
- It is essential for companies to manage the natural resources (fish, wood, arable land) in a sustainable way (long term and pollution free) in order to meet the needs of an increasing human population.
- Companies need to integrate the environmental cost of their activity into their prices.
- Sustainable development is not a constraint. It can be a very important business opportunity and a huge source of profit. Ecology and social responsibility = profit