Achieving more with less: ING on the scarcity of resources

A report by the Equity Research Team of ING Commercial Banking confirms that the world economy is facing immense challenges due to rising prices, high volatility and limited availability of agricultural commodities, water and energy. In this light, a conference on the scarcity of resources was organized on 29 March 2012, at ING House in Amsterdam. Renowned sustainable entrepreneur, Gunter Pauli, and CEO’s, CFO’s and Sustainability executives of some of Europe’s largest multinationals were on hand to discuss the topic of scarcity.

The report, named Food, Beverage & HPC. Increasing scarcity: risks and opportunities, was published this March. The researchers explored how FMCG (fast moving consumer goods) companies are affected by increasing resource scarcity and rising sources risks due to mega-trends in society, such as demographic growth, strong consumption growth, the social reset and food, energy and water stress.

Identifying mega-trends

With regard to demographic growth for instance, the trend was confirmed that the growing middle classes will consume more food and materials. Despite increasing action on issues like waste reduction and feed efficiency, these developments can cause food prices to rise. What is more, rising food production leads to more demand for fresh water and energy, also because of the need to have higher yields on current soils and to bring less arable land to generate a yield. Prices of these resources will therefore rise as well, probably leading to a further upward push to food prices.

Another example of a mega-trend that was researched is the move from a uni-polar era to a multi-polar one. This means that developing countries will become stronger competitors on the world market in terms of demand for scarce resources. With increasing fragmentation of world power in an environment of increasing scarcity, commodity price volatility will increase.

Because the report focused on the crucial questions how these mega-trends affect business and which businesses are best and worst positioned in this field several large multinationals were researched. At the conference at ING House Akzo Nobel, DSM, Deloitte, CSM, Nestlé, Henkel, Beter Bed and Telenet presented how they address the challenges from increasing resource scarcity and rising resource risks.

Discussing the topic with experts

In his welcome speech, Gunter Pauli made the business case for sustainable entrepreneurship, as a prerequisite for future growth and profitability. Pauli argued that organizations around the world should rethink their resources. ING’s CEO, Jan Hommen said that this also holds true for the financial sector. This means, amongst other things, that ING is actively stepping up our efforts to provide innovative financial solutions to the major social funding and investment challenges, in areas such as energy, education, health and commodities. With regard to the scarcity of energy resources, Hommen mentioned that the ING’s research teams are actively exploring the business case for energy transition.

To read the report Food, Beverage & HPC. Increasing scarcity: risks and opportunities, please click here.