usinesses today are operating in an ever moreinterconnected and globalized world. Supply chainsstretch across continents and are vulnerable todisruption. Consumer demands and government policiesare changing rapidly and will impact your bottom line i yourbusiness does not respond.Against this background o complexity we ace a new seto challenges. For 20 years or more we have recognizedthat the way we do business has serious impacts on theworld around us. Now it is increasingly clear that the stateo the world around us aects the way we do business.This report shows that population growth, exploitation onatural resources, climate change and other actors areputting the world on a development trajectory that is notsustainable. In other words, i we ail to alter our patternso production and consumption, things will begin to gobadly wrong. How wrong and or whom, is also explored inthe report.Intergovernmental treaties are yet to solve the issues and,at a national level, the transition to sustainable growthremains a goal rather than an achievement. The concept o“green growth” has gained ground but we still lack a preciseunderstanding o how we can achieve it along with higherstandards o living within the limits o our planet.Corporations are, o course, not passive bystanders in anyo this. Our report shows that global megaorces are likelyto bring signicant threats and opportunities.The resources on which businesses rely will become moredicult to access and more costly. There will be increasingstrain on inrastructure and natural systems as patterns oeconomic growth and wealth change. Physical assets andsupply chains will be aected by the unpredictable results oa warming world. And businesses will be conronted with anever more complex web o legislation and scal instruments.But this is not the whole story. Consumer and investor valuesare changing. And as they change more corporations arerecognizing that there is prot and opportunity in a broadersense o responsibility beyond the next quarter’s results. Thebold, the visionary and the innovative recognize that whatis good or people and the planet will also be good or thelong term bottom line and shareholder value. Competitiveadvantage can be carved out o emerging risk.At KPMG’s network o rms we have always been at theoreront o developments that shape business behavior.We are working with organizations to help them understandthe orces at work that will infuence markets and impactprotability in the medium to long term.This means moving on rom old notions o corporateresponsibility ocused purely on protecting and enhancingreputation. It means being aware that your business standto be aected as supplies o resh water decrease and costso energy rise and ecosystems decline. Knowing whatthose eects will be and how your business can managethem successully means developing a sophisticatedunderstanding o these actors and how they work.In this report we oer a starting point or discussion. Wepresent a system o ten sustainability megaorces that willimpact each and every business over the next 20 years. Wewant to build awareness that these orces do not act alonein predictable ways. They are interconnected. They interact.At KPMG, we encourage businesses to understand thissystem o orces; we help them assess the implicationsor their own organizations and to devise strategies ormanaging the risks and harnessing the opportunities. Wecan never know the uture. But it is good business sense tobe prepared or the possibilities: to expect the unexpected.This report cannot provide all the answers, and does notset out to, but it does suggest approaches that we believewill help to build business value in a changing world. Wehope it provides a useul springboard or new thinking,debate and above all business action to deliver a uturethat is both sustainable and protable.
Yvo de Boer
Special Global AdvisorKPMG Climate Change &Sustainability
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