Billions of dollars-worth of environmental costs to businesses are set to double every 14 years, according to new research.
The new estimate is based on a study which found environmental costs in 11 key industry sectors jumped 50% between 2002 and 2010, from $566billion (£361bn) to $846 billion (£539bn).
The impact of climate change, energy and fuel volatility and water availability are just a few of the sustainability ‘megaforces’ which are to blame for this, says consultancy KPMG.
The study, called Expect the Unexpected: Building Business Value in a Changing World, warns companies to expect environmental costs to rapidly accelerate, even if they don’t show up on financial statements today.
Michael Andrew, Chairman of KPMG International said: “We are living in a resource-constrained world. The rapid growth of developing markets, climate change, and issues of energy and water security are among the forces that will exert tremendous pressure on both business and society.”
The study also suggested business leaders who are more pro-active when it comes to sustainability are getting ahead of the costs.
It finds companies which recognise the external influences on their organisations early on and use them as opportunities are gaining a “competitive advantage”. This means that measuring and reporting sustainability activities is becoming “increasingly relevant and quickly becoming a priority”.
Climate change is one of the so-called ‘megaforces’ the study highlighted and it estimates the cost of climate change has an annual loss of between 1-5%.