New research from KPMG International has identified 10 ‘megaforces’ that will significantly affect corporate growth globally over the next two decades. The KPMG study, ‘Expect the Unexpected: Building Business Value in a Changing World’, explores issues such as climate change, energy and fuel volatility, water availability and cost and resource availability, as well as population growth spawning new urban centres.
The analysis examines how these global forces may impact business and industry, calculates the environmental costs to business, and calls for business and policymakers to work more closely to mitigate future business risk and act on opportunities.
Michael Andrew, chairman of KPMG International, said: “We are living in a resource-constrained world. The rapid growth of developing markets, climate change, and issues of energy and water security are among the forces that will exert tremendous pressure on both business and society.”
“We know that governments alone cannot address these challenges. Business must take a leadership role in the development of solutions that will help to create a more sustainable future. By leveraging its ability to enhance processes, create efficiencies, manage risk, and drive innovation, business will contribute to society and long-term economic growth,” he added.
The KPMG research finds that the external environmental costs of 11 key industry sectors – often not shown on financial statements – jumped 50% from US$566bn to US$846bn in eight years (2002 to 2010), averaging a doubling of these costs every 14 years. These external costs would not be something reflected on a balance sheet because they may be borne either by individuals or society at large. They are often both non-monetary and problematic to quantify for comparison with monetary values, such as the effects of pollution.
The report calculated that if companies had to pay for the full environmental costs of their production, they would lose 41 cents for every US$1 in earnings on average, the study found.
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