“The New Economy”, is an emerging business climate in which environmental and social constraints are presenting companies with new risks and great opportunities. The facts speak for themselves. With a projected 8 billion global population by 2025 and the growing demands of global consumption, environmental resources such as water and carbon will increasingly become constrained over the next 15 years. Different regions of the world are already experiencing serious resource depletion, the challenge for Irish business is to become more resource efficient and to play a part in protecting and recycling scarce resources.

Existing pressure points:

• Carbon: Governments around the world are starting to impose a cost on companies that emit greenhouse gases into the environment. In some industries, the cost of carbon is fundamentally altering the structure of business supply chains.

• Water: According to the OECD, 2.8 billion, or 44%, of the world’s population lives in areas of high water stress. Not surprisingly, water is rapidly rising up the political agenda while many companies have already experienced significant production downtime due to water shortages.

• Biodiversity decline: According to a survey by IUCN, half of the planet’s 5,487 mammal species are in decline, while a significant 21% of species are or may be at risk of extinction. NGOs and local communities which exist in fragile areas where industry seeks to expand operations are placing significant demands on Government and companies to act in a responsible progressive manner and do no harm.

All of the above pressure points can impact on access to good quality air, water, soil, food and raw materials, and could lead to socio-political instabilities and to businesses having to run their operations at sub-optimal levels as well as delaying or even cancelling planned development.

So what are the solutions for business?

Below, we present three main ways for Irish businesses to harness the challenges and generate real business value in The New Economy.

1. Cost reduction through resource efficiency:
Companies can become more resource efficient and add real business value by adopting an integrated approach, which combines process improvements with lasting behavior change in relevant parts of the business. In this Lir’s helped a number of businessess achieve cost reductions through waste reduction and other resource efficiency measures for a low carbon/ low water/ low waste  outcome.

2. Growth through innovation by integrating sustainability and green ideas
Consumer surveys in Europe and the US suggest that up to 25% of consumers regularly buy “Green Products” while another 30% keep a watching brief. Some companies have perceived these emerging trends and are already making new money out of them. For example:

• Philips generated 31% of total revenue sales from green products in 2009, reaching its target three years ahead of schedule.
• GE ecomagination portfolio has grown from 17 products to more than 80 products today. 2008 revenues reached $17billion, an increase of 21% over the previous year.
• Siemens increased in 2009 its revenue from Environmental Portfolio products by 11% to $28billion.

By accumulating knowledge about the wider sustainability of products and services, companies have the ammunition to drive change and improve long term competitiveness, whether they are selling orange juice or in oil and gas exploration.

3. A strengthened future by engaging effectively with stakeholders
More effective stakeholder engagement is another aspect of doing business in the New Economy. Increasingly, companies are looking at what kind of value can be gained or lost through the way they engage with stakeholders. In our experience, early engagement – with regulators, customers, community groups and between different parts of a disparate project team – is a key component of a successful outcome. Engaging early will help to ensure that resources are accessed and managed cost effectively – as well as strengthening your ties to the community.