Paper Identifies Environmental Opportunities, Challenges For Business

First paper in a series of 12 examining major trends to affect business in the coming 30 years

UNIVERSITY PARK, PA (January 26, 2007) – With recent natural disasters bringing more attention to environmental issues like global warming, a new paper from the Center for Global Business Studies (CGBS) at Penn State's Smeal College of Business provides a comprehensive look at the current state of the environment and offers recommendations for individuals and industry to reverse the current ecological degradation.

While global warming has been in the spotlight lately, mankind's effect on the environment does not stop there. In "An In-Depth Look at Environmental Degradation Challenges and Opportunities," the first paper in a series of 12 on international trends affecting business, CGBS researchers make clear the effect of business and industry on all parts of Earth's ecology—land, atmosphere, freshwater, forests, coastal and marine areas, and biodiversity.

"As the world population grows, our interaction with and infringement upon the natural resources this planet offers must become part of business decisions," CGBS Director Fariborz Ghadar writes in the foreword. "Every business, regardless of its size or industry, must view day-to-day operations in light of these global developments."

The paper is full of disturbing statistics and examples of the extensive damage that has been done to Earth since the Industrial Revolution. Fortunately, it also offers examples of commerce benefiting the environment, as well as some suggested solutions to major problems.

For instance, research shows that 15 percent of total land mass has already been degraded to the point where it can’t be used for agriculture; however, new methods and technology can combat further degradation and are already being implemented around the world.

Another example of business working to better the environment, although a controversial one, is taking place in countries like Mexico and Costa Rica. The governments there have invited pharmaceutical and cosmetic corporations to mine biodiversity within their borders, thus protecting precious rain forests from deforestation while making them available to business for the discovery of new medicines and cosmetics.

The paper argues that the environment and even environmentalism present many such business opportunities, which can both aid the environment and make a profit. Businesses need to respond now because environmental degradation is more than an ecological issues, it has serious consequences for business and the global economy, according the research report.

"We should embrace opportunities to better understand the profound influence of ecological processes and bring about and improved environmental balance," the researchers write. "This third way of viewing environmental issues can not only lead to a healthier planet, but also provide great opportunity and competitive advantage for businesses willing to work toward that balance."

The paper is part of the Center for Global Business Studies' Global Tectonics project, which has identified 12 international trends that will challenge business leaders in the next 30 years. In-depth analysis of each trend, or tectonic, will be published every other month for the next two years.

These trends were originally identified in the book Global Tectonics: What Every Business Needs to Know by Ghadar and Erik Peterson, senior vice president of the Center of Strategic and International Studies.

The next paper in the series, "An In-Depth Look at Conflict Patterns and Trends," will be released in February and assesses the impact of civil war, terrorism, and international conflict on the global business environment.

For more on Smeal's Center for Global Business Studies, visit www.smeal.psu.edu/cgbs.