and Threats
for Business
The higher the pressure, the bigger the opportunities to differentiate from competitors

Business Impact

Environmental challenges are a source of opportunities and threats that can have significant impact on companies. The impact can be highly tangible and affect corporate profitability in the short term, for example in case of cost increases of energy and other resources, or loss of market share to a more sustainable competitor. The impact can also be less tangible and longer term, e.g. an improved reputation and higher employee motivation.

Resource related opportunities & threats

Resource related opportunities and threats can emerge from four angles: supply, demand, governments, and other stakeholders, such as NGOs and investors.

The source and extent of pressure on companies will differ by industry and country. Most companies will experience some kind of pressure, from all four angles. Generally speaking, the impact will be higher if a) the company has a large environmental footprint (e.g. in the energy sector), or if b) sustainability is highly relevant for customers (e.g. certain consumer goods companies). Paradoxically, the higher the pressure, the bigger the opportunities to differentiate from competitors.

Companies need a thorough understanding of how environmental challenges like resource scarcity, pollution and climate change might impact their business, in order to manage the downside risks, and capture the upside opportunities.