Business opportunities from environmental risks?

Environmental risks at the current economic system.

Major environmental risks are climate change, pollution, water scarcity and increasing competition for resources. Businesses are looking into new ways of turning these risks into opportunities. This is leading to rapid growth in corporate commitments promising more action on the global goals. Above all, every market has its own environmental challenges and opportunities and businesses must identify the markets with the biggest opportunities to contribute towards the achievement of these global goals.

  • Resource competition

Environmental degradation, where renewable natural resources cannot self-regulate any more, is a major threat to companies. Apparently, it is likely to further limit access to basic resources, disrupting global production and supply, causing commodity price volatility and international conflicts. The circular economy is the new economic model for sustainable development, playing a key role in achieving the sustainable development goals. In other words, nothing is wasted, everything lasts longer and is shared, reused, repaired or recycled. This model reduces pressure on natural resources and brings economic and social
profits.

  • Climate change

Fundamental to the Sustainable Development Goals is the need to reduce global warming to pre-industrial levels to avoid catastrophic consequences. As a result, many countries are committing to become carbon neutral and businesses are joining global climate strikes for the first time. With corporations heavily dependent on natural resources for their operations, decoupling growth from climate impact has become imperative to survive.

  • Water scarcity

Water shortages are increasingly occurring around the world. They are disrupting consumers’ and businesses’ access to regular water supply and threatening business activities. As global concern over water scarcity rises, water resilience is becoming a key priority for businesses to navigate the water crisis.
However, this presents big opportunity for ingredient manufacturers and consumer good companies. Certainly, there is a potential to improve water quality and access along with opportunities to develop products with a lower water footprint.

  • Pollution

The rapid urbanization is increasing air pollution, especially in coal-based markets. For example, the fossil fuel dependency is harming many cities with air pollution. They starting to exceed the World Health Organization’s safe air pollution limits and posing a risk to human health. With air quality deteriorating in urban areas, governments are responding to this environmental threat with anti-pollution strategies. For instance, the UK ban on diesel and petrol cars by 2040, free public transport in some European cities or China’s fast-expanding electric car industry. Businesses are launching new products that either help consumers to improve indoor air quality or protect them from pollution.  In addition, 38% of millennial consumers looking for antipollution benefits in skin care. The anti-pollution trend first appears in the beauty industry, with several brands launching products with environmental protection claims.