Top 3 Trends in Natural Resources for 2017

Euromonitor International has identified three key trends in natural resources for 2017 including no rollback on climate initiatives, more proactive initiatives from business organisations to embrace resource management and the growing traction of the circular economy. The state of natural resources bear strong significance for the supply chain and manufacturing process as this involves future costs and profit margins. The finite supply of natural resources unless managed effectively can not only lead to higher costs but even threaten future growth of some commercial activities.

No rollback on climate initiatives

Initiatives to combat global warming will continue to gain momentum in 2017:

  • Globally, CO2 emissions per unit of output has gone down from 1,088 grams per US$ (constant prices) in 2010 to 677 grams per US$ (constant prices) in 2015, indicating improving carbon footprint thanks to multiple initiatives from governments and businesses as they start to appreciate the benefits of protecting the environment;
  • Donald Trump’s victory in the US presidential election has cast doubt on future climate actions given the President-elect is sceptical about environmental issues, but other initiatives and on-going commitments are expected to offset this;
  • China is increasingly committing to fight global warming and pledged to provide financial support, thus helping to fill any potential void if the USA is to reduce its role in the future climate initiatives.

World CO2 Emissions per Unit of Output 2010/2015

Source: Euromonitor International from Energy Information Administration of the US Government, International Energy Agency

More proactive initiatives from business organisations to embrace resource management

Companies are expected to embrace resource management more proactively in 2017:

  • Business organisations are coming to realise that the finite nature of natural resources can lead to a supply shortage, push up the price of inputs and squeeze the profit margins;
  • Benefits of embracing resource management are not necessarily confined to long term gains. For example, using recycled materials can be cheaper and help to lower the production cost;
  • The imperative to change patterns of production and consumption will grow and companies that are ahead of the curve, educating and leading consumers, will benefit.

The circular economy will gain traction

In 2017, companies are expected to invest more in exploring business models that are based on the principles of the circular economy:

  • As business ventures become more resource conscious, the circular economy is expected to gain traction in 2017 as a viable business model;
  • It is the anti-thesis of the current ‘build, buy, bury’ model, consisting of a system in which everything is reused and help to reduce the rate of resource depletion;
  • Circular economy closely resonates with The New Consumerism, which sees consumers reassessing their priorities, with conscious consumption increasingly replacing conspicuous consumption.