Opportunity

Turbulence = Opportunity!

Businesses have traditionally assumed that the resources that underpin our economic system will remain cheap and readily available. However, the increasing scarcity of resources alone is driving some companies to start their sustainability journey. “Resources” include:

Materials and Energy.

The chart on the right shows how prices of resources have fluctuated. It has six lines: 2 of energy (oil and coal), 2 of food (corn and wheat), and 2 of minerals (copper and iron). Our economy is based on cheap oil. However, every year since 1984, we humans have consumed more oil that we have discovered, and the gap keeps increasing. Plus, extracting oil from the new discoveries is more costly

Talent

Far-thinking executives are wondering how to replace the Baby Boomers who are starting to retire. And since the incoming work force is smaller than the retiring Boomers, the best talent will be highly sought after. Simply put, the best and brightest employees want to work for Sustainable companies. They want to work for companies that share their values.

Capital

The precipitous drop in the stock market in late 2008, coupled with lack of liquidity in the financial markets, presents another challenge. Socially responsible companies attract and retain the better shareholders and investors, and have a higher P/E ratio, because they carry lower risk.

Net/net: Companies that start seriously on their Sustainability journey will have competitive advantages in all scarce resource areas. They will also have an advantage in dealing with the increased regulations that are almost certain to be created in the coming years, because they’ll be well ahead of the regulatory curve.

How does Sustainability work? Click New Paradigm to learn more

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