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
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
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!