The World Resource Institute calls it "the elephant in the room" and says businesses need to ask tough questions about their economic models.
Over the past two decades, businesses have come a long way in their conversations about sustainability and climate change. What was once an unknown or avoided term has become part of mainstream corporate-talk. Many companies now have strategies for reducing emissions, implementing renewable energy, and mitigating deforestation and water pollution.
These strategies are admirable and progressive, but the World Resources Institute says that businesses are failing to address the “elephant in the room” – the idea that consumption can continue unchecked in a world with finite resources that are already tapped to the max. In a new report, the WRI calls on businesses to face the hard truth about consumption:
“Most businesses’ growth is still predicated on more people buying more goods. The world will have more than 9 billion people by 2050, and the middle class will have swelled by 3 billion by 2030. A continuation of business as usual would mean not just a slight additional strain, but three times as much consumption of the planet’s already overused resources.”
This topic tends to be avoided in corporate boardrooms because it challenges the traditional business model that has proven so economically successful; but the WRI argues that a transition to alternative models of providing goods and services to consumers is inevitable. It’s better for companies to get on board with this now, to start exploring and innovating, to figure out ways of “delinking from increasing resource and environmental impact,” than to be irrelevant and outdated with the inevitable arrival of more transformational companies in the near future.
The WRI’s paper makes three recommendations as a starting point for businesses to become aware of resource limitations:
1. Do the math by looking openly and honestly at their dependency on natural resources and the associated limits on business growth;
2. Take a leadership role by using their influence to change the conversation with key stakeholders; and
3. Transform the business to one that will thrive in a resource-constrained environment.
Consumers are driving this change, too. People are catching on to key phrases like “circular economy,” “cradle to cradle,” and “eco-efficiency,” wanting to see these associated with the products they buy. A shift is happening already, and the sooner big companies realize this and start rethinking their use of resources, the better off we’ll all be.