Business leaders should see sustainability as an opportunity, act now and prepare for radical change despite the recession.

Acting now for a positive 2018, preparing for radical change looks at the trends which will shape the future of business over the next decade – such as the end of cheap finance and resources, the impact of climate change, and the rise of markets like China with demand from their growing middle classes – and draws conclusions for business, governments and regulators.

This report describes four potential scenarios for 2018, and argues that the action business takes on sustainability will play a big part in determining which direction our world takes.

Global Interest – An effective globalised response to global challenges prompts increased resource productivity and low-carbon growth. Companies have to play a greater role in supporting public services and infrastructure but reap the benefits of a broadly free, stable and prosperous world.

National Interest – Nations hoard their own resources and tighten their borders in a retreat to nationalism and protectionism. Global businesses all but disappear and companies are expected to support the national interest.

Patched-up Globalisation – Emerging markets rise as China stalls. Low-carbon technologies thrive, particularly biofuels. Successful companies are multinationals with a local feel, helping to deliver local development needs.

Me and Mine, Online – A highly networked world undermines individual countries and companies. Successful companies are now more like branded hubs, coordinating often temporary and short-lived supplier relationships to deliver customised products.

The report argues that business should not wait for government action before taking the first step. Companies can gain competitive advantage by embedding sustainability into every important function and by looking for opportunities that will make money while taking them in the right direction.

Companies can respond to the recession by looking at improving energy and resource efficiency in their own operations, in their supply chains and with their customers. In the longer term they should maximise the value they get from every unit of material or energy. And they should seek out new technologies and business models which will create profit from the radical change which is needed.

But effective action by government and regulators is crucial to reduce the risk of a catastrophic environmental collapse and create the conditions for a truly sustainable economy, it finds. They should set key environmental targets and place greater responsibility on business to deliver these outcomes, but allow companies to meet the targets in their own ways. Legal sanctions should be a last resort.

This project was sponsored by the IT consulting and outsourcing firm, Capgemini.

Since publication...

The analysis in the report has been used extensively to help us understand the causes of the recession and why sustainability will drive the context for business as economies recover. You can find out more about our recession services here. 

The scenarios have been used in key note speeches with the Harvard Business Review Polska, 2degrees and the Chinese Institute of Certified Public Accountants and have also helped companies bring sustainability into their business strategies or product and service innovations.