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Impact of eco-credit crisis will be greater - MTI study

MTI Consulting, invited to research and present at the Global Environmental Strategy Conference earlier this week, have cautioned Governments and enterprises worldwide on the disastrous consequences of an impending eco credit crisis.

MTI’s presentation started by characterizing the global financial crisis as a transactional issue between humans and one that is based on imaginary wealth creation. The real challenge, MTI emphasizes, is the eco credit crisis, which simply means that the world’s fast growing population is using up resources at an unprecedented level, a significant part of which is not being renewed and is causing irreparable damage to the environment.

To illustrate this point, consider the concept of the Earth Overshoot Day - a day that marks the unfortunate milestone when humanity uses up all the resources that the Earth can regenerate in one year. In 1986, this was on the December 31, this year it was on September 23 and by 2050, it will be on the July 1, which clearly shows the Earth is using more resources than it can regenerate.

The intent of the MTI study was to research and develop a framework to integrate the environment strategy to business strategy. The Optimal Environment Impact Model, with a holistic and strategic focus, is intent on reaching the optimum levels between consumer value, environmental impact, bottom-line value and resource utilization.

The current approach adopted by the corporate enterprises, requires a radical change and this can only come by a combination of rewards and penalties targeted at both enterprises and consumers. Currently, environmental strategy is misconceived by enterprises as a discretionary philanthropic activity, another tax to be borne or as an idea driven initiative.

MTI Consulting suggests that governments should be actively involved in driving regulation, developing necessary reports as well as offering reward and recognition to those who deserve. At an enterprise level, it is recommended that organizations implement an environmental audit to understand their value addition and ensure optimum rather than excessive resource usage.

Alternatively, at the enterprise level, whether a conglomerate or a small medium enterprise (SME), there is a need to build a holistic environment in order to take account of the environmental implications.

In other words, to increase performance across one’s value chain, MTI has developed a Holistic Environmental Audit. By considering the supply chain and go-to-market initiatives from the perspective of human and resource energies, overall utilization is optimized.

Hence, one is weary of the resource utilization, disposal as well as wastages. Of course, streamlining these will impact the bottom-line positively. A practical method of implementing a resource optimization culture is to create the position of a second CEO, a Chief Environmental Officer, who would lead your organization.

In addition, performance base pay could be accounted for by an environmental impact score card. The underlying purpose is to ensure that this is part of the organization’s DNA.

One cannot deny that unlike the economic recession, governments cannot bail out enterprises from the emerging credit crisis.

Unlike with the financial crisis, no government will be able to bail out enterprises from the eco-credit crisis!

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