"Ecoflation" To Hit Consumer Goods

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					461                                                                                                          Enviromation


    The Australian government intends to introduce                      4. chart a new course by making sustainability princi-
carbon-trading laws into parliament in 2009.                               ples part of an action plan.

                                                                        For more information on the report, see www.wri.org.


        BUSINESS ENVIRONMENT
                                                                    KPMG 2008 Sustainability Report Study
                                                                         KPMG International recently released a study showing
                                                                    that the number of US companies reporting sustainability
‘‘Ecoflation’’ To Hit Consumer Goods                                data has doubled since 2005. Equally revealing is that ethics
                                                                    has overtaken economics as the primary reason for disclo-
     According to a new report prepared by the World                sure of environmental, social, and governance issues,
Resources Institute and global management consulting                according to a KPMG global analysis of corporate reports.
firm A.T. Kearney, increasing pressure on natural resources
will mean higher costs along corporate supply chains, and                 The KPMG International Survey on Corporate Respon-
firms in the fast-moving consumer goods industry could              sibility Reporting is the most comprehensive survey yet
see earnings fall by 13 to 31 per cent by 2013, and by 19 to        conducted on environmental, social, and governance dis-
47 per cent in 2018, if they do not incorporate environ-            closures, reviewing reports from the Global Fortune 250
mental sustainability strategies into their business practices.     (‘‘G250’’), and from the 100 largest companies by revenue
                                                                    in 22 countries. The survey is the sixth in a series conducted
      According to the report ‘‘Rattling Supply Chains: The         by KPMG since 1993 with reports issued every three years.
Effect of Environmental Trends on the Fast Moving Con-              Analysts searched only publicly available information (e.g.,
sumer Goods Industry’’, increased environmental costs will          Web sites, corporate responsibility reports, and financial
be borne primarily by private firms, and will lead to ecolog-       reports), and collected information on over 50 data points
ical inflation (or ‘‘ecoflation’’), as a result of such costs not   from each company associated with corporate responsi-
being currently priced into economic transactions. The              bility reporting, standards, processes, drivers, and issues.
study predicted that the future drivers of increased envi-
                                                                         The survey found that, among the top 100 US compa-
ronmental costs will be (1) climate change policy
                                                                    nies, 74% published corporate re
				
DOCUMENT INFO
Description: According to a new report prepared by the World Resources Institute and global management consulting firm AT Kearney, increasing pressure on natural resources will mean higher costs along corporate supply chains, and firms in the fast-moving consumer goods industry could see earnings fall by 13% to 31% by 2013, and by 19% to 47% in 2018, if they do not incorporate environmental sustainability strategies into their business practices. The study predicted that the future drivers of increased environmental costs will be climate change policy, water scarcity, deforestation, and biofuels.
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