Production NW - Context
The role of resource productivity in business competitiveness & market transformation
Business in a small world
Environmental sustainability is generally identified with fixed limits defined by local or global thresholds, in environmental capacity / risk / irreversible change. Meanwhile businesses are generally identified as small inter-dependent parts of a much bigger picture: as part of a economy: as part of a product supply chain: as part of a system which delivers human welfare. It is generally very difficult to translate the environmental thresholds to specific targets for business in any sector, as they are all in some way inter-dependent.
It is also clear that often the major effects of business are not direct material flows through their gates, but 'induced' effects elsewhere in the supply chain. For instance a supplier of concrete blocks might accept some responsibility for the emissions of a cement factory - but how many estate agents will accept responsibility for the factory, even while they are profiting indirectly from that activity? Many businesses will naturally argue for 'externalizing the externalities', as such costs may equate to their profit margin. This becomes more important, the more an economy shifts from a material basis towards a service basis, i.e. over 75% of the economy in wealthy countries. It is also significant in terms of the emerging CSR agenda, where businesses are being pressured into new linkages of social / environmental responsibility.
The resource flow analysis approach has much to offer this question, particularly in its 'next generation' form where flows between industries are represented through the input-output method. The REAP toolkit developed by SEI / CURE / WWF is potentially the foremost point of reference in identifying resource flow 'profiles' and sustainability thresholds in business sectors. The REAP calculates these at the level of sectors and product types: these are then an 'envelope' or benchmark to compare with actual business or product performance.
