Scarcity of raw materials, higher operating costs, government restrictions, and reduced flexibility are just some of the difficulties corporations will encounter if they do not change their operations to account for the ongoing degradation of ecosystems and the vital services they provide.
The warning comes in a new publication released on Monday, produced by the World Business Council for Sustainable Development, Earthwatch Institute Europe, IUCN-World Conservation Union, and the World Resources Institute, is based on global scientific facts and forecasts from the United Nations' multi-year Millennium Ecosystem Assessment.
The study, "Ecosystem Challenges and Business Implications," offers a detailed examination of the implications that water scarcity, climate change, nutrient overloading, biodiversity loss, habitat change and the overexploitation of oceans will have for the future of business.
It warns companies to prepare for these risks by measuring their impact and dependence on ecosystem services, taking advantage of emerging business opportunities and reducing their operational footprints.
"Human impact on the natural environment has quickly led us to the limits of the earth’s carrying capacity," says Nigel Winser, executive director of Earthwatch Institute Europe from his office in Oxford, England. "Business, working in partnerships and by transforming current practices, must be part of the solution."
Businesses can turn these difficulties into opportunities, the report finds, if they will conduct systematic reviews of their dependence on ecosystem services and the impacts their operations have on natural resources.
Corporations can develop new technologies and products that will serve as substitutes, reduce degradation, restore ecosystems or increase efficiency of ecosystem service use. They can identify and participate in new markets such as water quality trading, certified sustainable products, wetland banking and threatened species banking. They can engage in new businesses such as ecosystem restoration and environmental asset finance or brokerage.
However, the report finds that most companies fail to recognize the link between healthy ecosystems and their business interests. "Leading businesses have always adapted to new realities," said Janet Ranganathan, director of the People and Ecosystems Program at the World Resources Institute, based in Washington, DC. "The new reality is that ecosystems are losing their ability to produce some of what businesses value most."