A new report by Arthur D. Little urges businesses across all sectors to consider the cost of carbon when planning for long-term growth, or risk losing out to sustainability-savvy competitors and new emerging market players. In "Ensuring survival: Business models in a low carbon world," the consultancy's Energy and Sustainability practices argue that in 2009, the carbon agenda will leave no business untouched, through multiple direct and indirect routes - from brand recognition, to the cost-base, to investors' perceptions of value.
Beginning with the assertion that "carbon is an unstoppable steamroller," the report identifies the drivers that will push a steady increase in the price of carbon, and explains why even low-emitting industries must identify the risks and opportunities presented by a low carbon economy.
"Whether in emerging or developed markets, companies with innovative solutions to thrive in a low carbon economy will have a competitive edge; this applies both domestically and as they expand globally," reflects Richard Clarke, Director of Arthur D. Little's Global Sustainability Practice. "Conversely, companies that do not take this on board will lose their competitiveness, as the cost of carbon drives up operating and raw material costs, and leads to supply-chain inefficiency."
As the investment community re-assesses the sources of risk and reward based on anticipated environmental regulation, carbon exposure is emerging as a key risk indicator. Leaders charged with safeguarding and growing company value must explicitly communicate how carbon costs factor into their investments, business models, and growth strategies.
The report urges CEOs to rethink what corporate sustainability means to their future business models and:
"The narrow view of a sustainable business - one that simply doesn't damage the environment - has been losing currency for years," concludes Peter Hughes, report co-author and a Director of Arthur D. Little's Global Energy Practice. "In a low carbon world, a sustainable business is one that keeps growing despite increasingly intertwined threats over natural resources, shifting centres of political power, and long-term societal changes. No business can reasonably put off considering these material implications any longer."
The Ensuring Survival report is now available for download at http://www.adl.com/ensuringsurvival
About Arthur D. Little
Arthur D. Little, founded in 1886, is a global leader in management consultancy, linking strategy, innovation and technology with deep industry knowledge. We offer our clients sustainable solutions to their most complex business problems. Arthur D. Little has a collaborative client engagement style, exceptional people and a firm-wide commitment to quality and integrity. The firm has over 30 offices worldwide. With its partner Altran Technologies, Arthur D. Little has access to a network of over 16,000 professionals. Arthur D. Little is proud to serve many of the Fortune 100 companies globally, in addition to many other leading firms and public sector organizations.