Environmental Risks Amongst Biggest Global Challenges

The World Economic Forum (WEF) has published its annual global risks report, ‘The Global Risks Report 2018’, citing the different types of risks the world faces. These include extreme weather events, natural disasters, water crisis and biodiversity loss. Euromonitor International’s Natural Resources system helps clients to understand the challenges that such risks pose, with our database of multiple categories including CO2 emissions, mean temperature and crop yield. Extensive analysis explore how businesses are preparing and adapting to big themes surrounding environmental and sustainability issues.

The threat of rising pollution

More than 90.0% of the world’s population live in areas where air pollution exceeds World Health Organization (WHO) guidelines. In Asia Pacific, governments are taking drastic decisions. For instance, Beijing has banned major public construction projects from November 2017 to March 2018. Cities such as Beijing, Shanghai, New Delhi, Bangalore and Karachi are on the list of the most polluted cities in the world with 99% of the urban population breathing air with Particulate Matter (PM) concentrations higher than those recommended. Globally, CO2 emissions from the consumption and flaring of fossil fuels increased by 4.5% between 2011 and 2017 corresponding with growth in final consumption of coal, peat and oil shale by 3.6%.

Euromonitor International’s briefing, ‘Global Energy Transformation: A New Energy Context’, explains the factors contributing to CO2 emissions as well as new green initiatives to curb the challenge.

• Did you know that the UK-based bio-bean company has partnered with Shell to develop a coffee waste-derived biofuel to power buses in central London?

Impact of extreme weather and natural disasters on businesses

Extreme temperatures are amongst the risks covered by the WEF and the impact this could have on the agricultural sector. For example, the mean temperature in Argentina, a country where corn is an important export, increased by 1.1°C in the decade to 2017. Extreme weather is associated with higher instances of natural disasters, posing a greater risk to doing business. Out of 171 countries in the World Risk Susceptibility index (a sub-category of the World Risk Index), 113 countries had a lower score in 2017 compared to 2011 on account of increasing likelihood of natural disasters. Euromonitor’s White Paper, ‘Sustainability and the New Normal for Natural Resources’, discusses the impact of rising risks of natural disasters on businesses.

• Did you know that household names such as IKEA and Philips sponsored the Paris Agreement? Extreme weather patterns pose risks to their business.

Loss of biodiversity at an accelerated pace

The threat to reptile species is the highest with the number of threatened species increasing by 45.6% between 2011 and 2017, followed by birds and fish endangerment, which increased by 30.5% and 26.1% respectively. One of the reasons behind the loss of reptile and bird biodiversity is the loss of forest land, which reduced by 151.8 thousand square kilometres between 2011 and 2016. Biodiversity loss contributes to an imbalance in the eco-system with far-reaching economic and social consequences.

• Did you know Unilever is one of the founding members of RSPO (Roundtable on Sustainable Palm Oil), established in 2004 with the objective of promoting growth and use of sustainable oil palm products to reduce the rate of deforestation?

Food security a key future challenge

There is a growing fear that widely consumed grains such as wheat are likely to experience a shortage in the future, on account of changes in weather patterns, increasing the risks of food insecurity. One of the most immediate solutions is reducing food waste. Euromonitor’s briefing, ‘Food Waste: Implications and Opportunities’, explains how this area opens up new opportunities for businesses, providing them with strong incentives to address the challenge.

• Did you know that MasterCard is running pilot projects in Africa to help smallholder farmers with improved farming techniques to prevent food loss?

Source: Euromonitor International 

The looming water crisis and search for solutions

Renewable water resources per capita have declined by 6.8% between 2011 and 2017, reinforcing the WEF’s prediction about a global water crisis. Shortage of fresh water supply will have a significant impact on all aspects of the global economy including agricultural and industrial production, mining, human health – to name a few. Euromonitor’s briefing, ‘Global Water Risk – Building a Resilient Business’, provides examples of solutions which can help to curb the challenge.

• Did you know that Nestlé Mexico installed technology at one of its ice-cream plants to extract excess water from incoming milk, which it recycles in order to reduce water loss?

Increasing role of the business sector in tackling environmental challenges

Sustainable Development Goals (SDGs) initiated by the UN in 2015 – the most important and comprehensive initiative in this area – aim to bring about effective solutions by bringing together governments, the private sector and civil society. One example of an SDG is developing greater access to clean water and sanitation across the world. In Somalia, only 33.0% of the population have access to improved drinking water sources. Euromonitor’s webinar, ‘Sustainability and the New Normal for Natural Resources’, discusses not only why issues relating to sustainability are setting a new normal but how businesses are benefiting from new sustainability opportunities.

• Did you know Coca-Cola has launched a US$30 million programme called RAIN which stands for the Replenish Africa Initiative? The objective of the programme is to develop access to safe drinking water for 4 million people by 2020 through 42 water projects in 27 countries.