Mar 7, 2012

Exploring Business's TruCosts

Which industry's future looks the most troubled: Airlines or Beverages? A recent report released by international tax expert/auditor/advisor KPMG identifies the environmental costs, and subsequent near-term business risks, of 11 global industries: Telecommunications & Internet, Automobiles, Chemicals, Marine Transportation, Oil & Gas, Airlines, Mining & Minerals, Electricity, Food Producers, and Beverages. The first startling finding, "External environmental costs of the 11 sectors rose by 50 percent between 2002 and 2010"1 is underscored by the finding that matters most to business people, "Costs of environmental impacts are doubling every 14 years."

The report, Expect the Unexpected, (download executive summary here) begins with the premise "Global sustainability megaforces will affect the future of every business." The report seeks to analyze "dozens of forecasts" relating to the impacts of: climate change, energy & fuel, material resource scarcity, water scarcity, population growth, wealth, urbanization, food security, ecosystem decline, and deforestation on business's well-being. All of this is rather reminiscent of the pioneering eco work of Lester Brown, who's Earth Policy Institute promotes the systems view that 1+1+1 might = 5.  

KPMG says,
 "Trend projections prepared without consideration of the entire system of megaforces no longer provide an adequate basis for strategic business decisions."
thus arriving at the following Risk and Readiness Matrix (click to enlarge):

KPMG, "Without action and planning for the complex future that lies ahead, risks will multiply and opportunities will be lost." The study recommends these sectors work with government and civil society to develop stronger, more coherent, green policies, which "address both how and which goods and services are produced." Or else? Information for the report was provided by environmental data experts TruCost.


1. 50% increase "from US$566 billion to US$854 billion" -- My blog sourced from a press release/blog on Environmental Leader.  

1 comment:

polit thoughts said...

Security is Pretty much another way to say sustainability. Is makes a good argument for a corporate security metric.