SustainabilitySustainable Technology for the Future - Silvia Rudigier <[email protected]>, Thematic Research
16.09.2013 Global problems such as scarce resources, climate change, and air pollution make resource efficiency an especially significant issue. To remain competitive in the long term, society and business – especially in emerging-market countries – need to adopt processes that use commodities in a more responsible manner. [image: Sustainable Technology for the Future] Business will need to be less reliant on fossil fuels going forward.* *Many firms are suffering from a rise in the cost of raw materials. By adopting production processes that use commodities in a more responsible manner, businesses can be expected to gain competitive advantage in the global market. Politicians are also under increasing pressure to promote lower emissions and waste, and to introduce stricter environmental legislation for companies and society. Examples include fuel efficiency standards for vehicles, the EU Energy Efficiency Directive, and China's 12th five-year plan. In addition, politicians from emerging-market countries are now promising to encourage companies and households to cut their energy emissions further still. The promise to cut emissions stems partly from the growing prosperity of the middle classes in these countries – a development accompanied by a rise in the consumption of resources. The biggest beneficiaries of this situation, as well as from scarce resources, will be firms that are able to develop and commercialize new, emission-reducing, resource-efficient technologies. See also: - Putting a Price Tag on the Environment<https://www.credit-suisse.com/publications/one-articles/news-and-expertise/2013/08/en/others-pay-the-price.html> Significance of the Emerging Markets The growth and the increasing prosperity of the middle class in emerging-market countries – China especially – is resulting in increased demand for energy and rising air pollution. In an international study, researchers proved that average life expectancy for people in the Chinese cities north of the Huai River is five-and-a-half years shorter than that for people south of the river. For years, government has provided this region with free coal for heating in the winter months; areas to the south, meanwhile, have no free supply. People in China are worried by the worsening air quality in the cities. Government targets such as those contained in China's 12th five-year plan – which specifies reductions in emissions for the coming five years – are no longer enough. Politicians are therefore announcing proposals for further reductions in emissions. These additional measures could amount to more than five percent of China's current emissions by 2020, according to the International Energy Agency (IEA). Demand for energy-efficient technologies aimed at reducing emissions is therefore expected to be dominated by the emerging-market countries. However, demand for this type of technology is crucially dependent on the emerging-market countries' ability to actually implement these additional reductions in emissions. Should this prove successful, firms with a strong competitive position in emerging-market countries will enjoy the greatest earnings potential. However, if environmental legislation were to be delayed or not implemented at all, this would constitute a risk factor for the firms affected. Which Sectors Could Benefit? If the IEA's scenarios are confirmed and demand for energy-efficient technologies for reducing emissions does indeed increase, sectors such as transportation, energy production and distribution, buildings and civil infrastructure, industry, as well as waste and recycling using new technologies will be the biggest beneficiaries. In the transportation sector, the spotlight is on reducing CO2 emissions through nationwide rules as well as a reduction in the dependence on oil. Potential income is likely from the use of resource-efficient technologies in batteries, lightweight materials (in transportation, for example), and tires (labels that indicate a tire's energy efficiency, for example). The waste and recycling sector also offers attractive growth potential, as only a fraction of waste is collected and recycled. According to the United Nations Environmental Program (UNEP), just ten percent of residential waste in emerging-market countries is recycled. In view of the growth in population and incomes, demand for waste management and recycling is therefore especially high in the emerging markets. Strategies for the Future Many businesses have already begun to implement more sustainable growth strategies and to use resources more efficiently. This enables them to save costs, build up market position for the future, and meet the demand for more ecological products. However, there remains a lot of scope to extend these sustainable, resource-efficient measures – which is seen as an opportunity for many companies. Technology firms in particular could become market leaders as a result of innovation. What's more, politicians – above all in the emerging-market countries – will also need to improve conditions (incentives, support programs) for companies and be stricter when it comes to implementing targets for reducing the consumption of resources and energy -- -- NIFTYVIEWS.COM NOW A FREE OPEN SOURCE WEBSITE. http://www.niftyviews.com/ Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture.The administrator of www.Niftyviews.com just provide a platform for the authors to express their opinion and take no gurantee for the genuineness of the same." --- You received this message because you are subscribed to the Google Groups "TEAM STOCKRESEARCHERS" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. 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