2014

Access to energy and raw materials important to business leaders

With momentum building towards the UN Climate Change Conference in Peru, new figures from Grant Thornton’s International Business Report (IBR), a survey of 2,500 companies in 34 economies, reveal that businesses leaders in emerging markets are more focused on the sustainability of their operations compared with peers in developed markets.

This is the key finding from Sustainability: changing the debate in emerging markets which reveals a keen appetite in emerging markets for clean energy technology, with business leaders reporting that the cost, reliability and sustainability of energy is a priority for their expansion. Over three-quarters (76%) of African business leaders, 72% in Latin America and 67% in Southeast Asia say that the cost of energy is important to their growth strategy over the next 12 months; this compares with just over half in Europe and North America. Reliability of the energy supply is also vital, with businesses in Africa (71%), Eastern Europe (71%) and Latin America (65%) most likely to cite supply as important to their growth strategy.

Nathan Goode, global leader for energy and cleantech at Grant Thornton, said:
“These results highlight the fact that we need to change the narrative of the sustainability debate. Sustainability has traditionally been seen as a cost to business; the burden of supporting the common good. However our recent research shows that business leaders are increasingly motivated by the cost management benefits of moving towards more socially and environmentally sustainable practices . We need to start talking in language that resonates with businesses, stressing the benefits of action and the costs of inaction.

"Even without a global agreement on lowering carbon emissions, it is encouraging to see businesses promoting sustainability. The political leaders of major emerging economies continue to affirm that their number one priority is the eradication of poverty. However the growth of these economies increasingly relies on how they manage access to scarce resources such as water. There is no choice to be made on whether to focus on sustainability or poverty; the two are mutually dependent. Businesses in these markets are telling us that the cost, availability and sustainability of energy and raw materials are vital to their growth prospects. Their voices need to be heard."

The IBR reveals that the emerging markets most concerned with the cost and supply of raw materials are also the most focused on looking for sustainable sources; Latin America (64%), Africa (51%) and southeast Asia (49%) recognise the long-term importance of greener energy sources to their businesses. On a country-specific level, India (83%), Mexico (74%) and Botswana (72%) topped the list for green focus.

Nathan Goode added:
"The focus on sustainability in emerging economies is driven by a number of factors including the resource-intensity of their growth and the impact climate change is already having on their local environment. Businesses  in these economies clearly have a keen appetite for investment in green technologies which have moved on rapidly as the supply of more traditional energy sources has become more volatile. The opportunity in emerging markets is huge; the debate should now focus on how - not whether - these technologies are deployed."

Download the full report.

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Dominic King, Editor, global research, +44 (0)207 391 9537