Competition for key resources and converging sustainability pressures in developing countries could “trigger far-reaching instability” in the global economy, according to a report that calls for governments and businesses to look at the bigger picture on resilience.
The report, from the Earth Security Group, argues that resource pressures in global commodity markets could derail investment and development goals if leaders fail to act. In order to tackle cross-border sustainability issues that undermine the pace of growth in emerging economies, greater levels of business diplomacy and a step-change in innovation is needed, the organisation adds.
The 2015 Earth Security Index analyses seven commodity markets, including oil, gas, rice and coca, and identifies actions that the largest companies in Asian, African, South American and Middle Eastern markets can take to strengthen resilience.
Alejandro Litovsky, CEO of the Earth Security Group and author of the report, said, “Beyond a common appreciation of commodity ‘super cycles’, analysts and investors should be aware that future disruptions in the global supply of resources will be linked to slow-burning sustainability pressures. Governments and businesses must anticipate these risks and cooperate across national borders to promote strategic investments in sustainability and resilience.”
The findings suggest there are “significant public private investment opportunities” that exist in building resilience, including sustainable technologies and infrastructure. Such investments will help multinational companies manage their exposure to resource risk whilst underpinning development goals, the report adds.
Chris Brett, head of corporate sustainability at Olam International, explained that global companies have to deal with “increasingly complex stakeholder expectations” and business sustainability means transforming risks into opportunities for growth and economic resilience.
The report contains seven blueprints that identify risks affecting business and government interests in key commodities and highlights opportunities.
Litovsky adds, “The report’s blueprints highlight win-win opportunities for innovation in sustainable technologies, infrastructures, business models and policies. These solutions can help companies and governments build resilience to the political and economic risks associated with resource pressures.
“However, to realise these opportunities, investors, risk managers, business strategies, and sustainability professionals must work together across corporate silos, and engage externally with policymakers.”
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