Analyzing the Resource, Climate & Sustainability Megatrend Impact

This essay provides an in-depth analysis of the resource, climate, and sustainability megatrend and its impact on the international business landscape. It begins by defining megatrends and highlighting their significance in shaping the global economy. The essay emphasizes the importance of understanding these trends for businesses to effectively exploit opportunities and mitigate challenges. It identifies climate change and resource scarcity as critical issues, presenting both challenges and opportunities for sustainable economic development. The essay also discusses how rapid urbanization exacerbates resource scarcity and affects global supply chains. Examples of successful companies, such as Pavegen, are provided to illustrate how businesses can leverage these megatrends for innovation and growth. Furthermore, the essay explores the challenges faced by organizations like Diageo due to water scarcity and climate change, and proposes strategies such as lean production, water recycling, and groundwater replenishment projects to overcome these obstacles. The analysis underscores the necessity for businesses to adopt sustainable practices to ensure long-term survival and maintain profitability amidst increasing environmental pressures.

Global
Challenges

Contents
INTRODUCTION...........................................................................................................................1
Evaluation of the resource, climate, sustainability megatrend and how it impacts business
landscape................................................................................................................................1
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business sectors and industries on global scale are affected by international megatrends
which shape the global macroeconomic environment. The megatrend which is the focus of this
essay is resource climate and sustainability megatrend. This essay analysis and provided
evaluative insight on the megatrends and its impacts on international business. Example of
organization which is impacted by this megatrend is included in this essay along with the
challenges introduced by this megatrend and ways of overcoming the challenges to gain
sustained competitive advantage. Impact of resource climate and sustainability on future leaders
and managers is also reflected on this essay.
Evaluation of the resource, climate, sustainability megatrend and how it impacts business
landscape
Megatrends are defined as global transformative forces which shape international
economy, society and business on an international scale (Mirtchev, 2021). These forces are
supported by fact based information and include biggest challenges and opportunities provided
for society. Megatrends are not a new concept and businesses, government agencies and non-
government institutions prepare strategies in order to face megatrends. It is important to
understand the impact of megatrends on the economy by business firms that they are able to take
effective action for exploiting the opportunities introduced by the megatrend and facing the
challenges of the megatrend in an effective manner. Understanding the impact of megatrends on
society and economy provides an insight on the future conditions and requirements of business
management to reduce negative impact of the megatrend and facilitate global development.
Megatrends can be identified by looking at the world economic forum risk report which provides
information multitask holders and global shaping risks along with their impact and likelihood
(Arno, Blaschke and Biewendt, 2021).
The megatrend related to the ongoing climate crisis, resource scarcity affecting society
business and economy is impacting the international business landscape. The importance of this
megatrend is depicted by the domination of environmental topics on the global risk report of the
world economic forum. Half of the top ten risks identified in the global risk export of the world
economic forum are related to environmental issues. This includes risks with high likelihood
such as extreme weather, biodiversity loss, climate action failure, natural disasters and human
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made environmental disasters. The risk of extreme heat waves, destruction of natural eco-
systems and uncontrolled fires exceeds the 70% mark (Global risks report 2020: These are the
top risks facing the world, 2020). This showcases the high likelihood of occurrence of risks
relate to resource climate and sustainability. Business firms, governments and other institutions
are taking action to battle challenges introduced by climate and resource crises and sustainability
awareness of the society is increasing which also an impact of this megatrend.
The megatrend looked in this report is resource, climate and sustainability. Climate change
and global warming have affected the natural ecosystem of the globe. This along with increasing
consumption has created a resource scarcity with resources such as water, fuel and food sources
are becoming scare on an international scale (Gauthier and Zhang, 2020). This has created
economic concern as these megatrends affect the economic productivity on global scale. It is
important to identify sustainable solutions for the problems introduced by this megatrend in
order to facilitate future economic growth. It can be determined by evaluating this trend that the
climate and resource crisis provide challenges and opportunities to the current global business
environment. The opportunity introduced by resource scarcity and extreme climatic conditions is
to formulate economic and business collaborations with different organizations to face
worsening climate conditions such as increase sea level which enhances resource scarcity.
There is also the opportunity to focus on sustainable economic development by taking action
on international scale to reduce carbon-footprint and increase optimal usage of basic resources
such as water, land and energy. The changes in the physical environment caused by climate
change will challenge time honoured traditions in society, corporate world and economic
practices to focus on the health of the planet and facilitate equal sustainable progress for all.
Another challenge posed by this megatrend is related to maintaining high profitability amid the
rapid climate changes. Facing resource scarcity in terms of depilating energy resources when
sustainable energy resources are not as viable will affect the profitability and economic
conditions on a global scale. This is because the price of production will increase due to scarcity
of basic resources (Gollnhofer and Schouten, 2017).
Looking at the issues created by the megatrend of resource climate and sustainability the
issues of this megatrend are linked to the other megatrend of rapid urbanization. This is because
rapid urbanization will increase stress on natural supply chain to satisfy much higher demand
levels. In case of the international business environment urbanization and resource scarcity has
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positive implication of increasing efficiency of natural supply chains but the negative implication
of increasing the vulnerability of global supply chains. The business opportunity related which
climate change and resource scarcity is about efficiency, growth and innovation which moves
further than high carbon industries such transportation and energy to all industries. Companies
can save energy and material costs, deliver developing consumer requirements, enhance their
reputation and better attract and retain talent with the help of reduction in emissions of those
consumers and suppliers (Kelleci, 2021).
Example of a business firm being able to succeed o an international scale by focusing on
sustainability is UK based green tech start-up Pavegen. The green technology start-up has
created a product which converts kinetic energy of footsteps into both electricity and data and
has also created an ecosystem through which people can be rewarded for using Pavegen
walkways. The company has gained global success with clients including multinational
corporations such as Google, Coca-Coal and the US government (The Tesla Of Smart Cities?
Pavegen's On A £5m Mission To Supercharge Your Sidewalks, 2018). The product provided by
Pavegen is on path to become an essential element of Smart citifies in the future. In this way the
respective company was able to exploit the business opportunity provided by climate crises and
resource scarcity by offering an innovative solution for energy production and reducing negative
environmental impact. This shows that from commercial perspective the on-going climate crisis
and resource depletion provided the opportunity to potential entrepreneurs for coming up with
smart and solutions to such problems and succeeding on an international scale.
Another challenge proposed by resource scarcity and climate crises is that it can lead to
increase in regional and national conflicts for natural resources such as oil, water, fishing and
hunting (Klingenberg and Rothberg, 2020). This is because climate change will increase the rise
of sea-level which will lead to land depletion. This will increase national disputes related to land,
fishing and hunting areas and also increase the scarcity of oil. Energy and land scarcity will have
negative implications on business environment as the primary resources needed for conducting
business activities will become rare and expensive. In addition to this political disputes will
further increases difficulties for businesses as government will focus on preserving their natural
resources which can also lead to worsening situation for international trade. In this way the
megatrend of climate, resource and sustainability introduces certain challenges while also
offering businesses opportunities for growth of the company.
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An organization which is being affected by the megatrend of resource scarcity, climate
change and sustainability is UK based beverage producer Diageo. The main challenge introduced
by this megatrend is increased scarcity of clean water supply which can be used to produce
various brands of alcoholic and non-alcoholic products. Climate change has negatively affected
the affected the availability and cost of water which is key raw material of many drinking items
(Mohr, Fuxman and Mahmoud, 2021). In addition to this, shortage of water supply, changing
weather patterns and extreme weather conditions all around the globe also impact the agricultural
production of other basic raw material needed for producing high quality alcoholic and non-
alcoholic products on a commercial scale. In this way the climate change creates challenge for
continuing profitable production of beverages and avoiding high increase in production costs to
retain middle income consumers.
The megatrend of resource, climate and sustainability affects long-term survival of major
beverage companies as water supplies are becoming more scare and accessing clean water is
becoming more expensive. The issuer of shortage of clean water supply is a major issue for
beverage and drinking firms as the target consumer base for such organizations is middle income
consumers. The rise in basic raw materials for production will lead to increase in cost of the
products. Offering drinking and beverage products at higher price can lead to loss of middle
income consumer by beverage company and negatively affect the profitability and possibility of
long-term survival of such businesses who are dependent on mass purchase from middle income
consumer to maintain profitability (Prothero and McDonagh, 2021).
In case of Diageo the target consumer base of the company includes middle income
consumers along with high income consumers. This is because the company has created a brand
portfolio which increased international and local alcoholic drinks brand targeted towards booth
middle income and international income consumers. This means that alienating middle income
consumers can be very harmful for the respective company. In this way the megatrend of water
scarcity and climate change reducing the areas not only affects the current cost of production of
Diageo but also affects the future survival of the company.
The most effective method of overcoming this challenge is for Diageo to adopt innovative
water and energy conservation methods which can help the company optimally utilize water
resources and face declining water supply conditions. The best approach through which Diageo
can overcome this challenge is by following the principles of reducing, recycling and
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replenishing. In the first principle the focus is on reducing unnecessary water sage at the
company. This can be done by adopting lean production which will help the company eliminate
water wastage in any form. In addition to this, Diageo also need to improve technological
infrastructure across all its manufacturing plants to ensure that water usage in preparation of
spirits and other beverages is minimized. The advantage of this method to battle the challenge of
high scarcity of water resources is that it will help the company keep products costs low (Samuel
and et. al., 2021). This will eliminate the main negative impact of climate change and resource
scarcity of Diageo. The negative impact of using lean production to ensure optimal utilization of
water resources is that adoption of lean manufacturing can increase margin of error in other
operations of the company.
The focus of recycling water usage involves reusing maximum amount of water in various
business activities which also supports maximum utilization of scare resource such as water. In
order to accomplish water recycling, Diageo needs to recycle water in various bottling plants
around the globe in various secondary applications such as boiler makeup, cooling towers,
garnering, toilet flushing and floor cleaning. This can also be done installing rain water
harvesting apparatus in their bottling plants and distilleries. The positive impact of this method
used for overcoming the challenges created by climate, resource and sustainability is that it will
lower requirement of additional water supply as every drop of water will be utilized efficiently at
the company. The negative impact of adopting water recycling and reuse methods at distilleries
and bottling plants of the company is that it involves implementation of advanced technology.
The last method which can help Diageo build capabilities for effective water usage and face
the challenge of rising production costs created by water scarcity involves replenishing current
water resources. This can be done by implementing various ground water replenishment projects
at grassroots level in areas which are affected by drought (Sheth and Parvatiyar, 2021). The firm
needs to collaborate with NGO’s, local agencies and communities to implement such water
replenishment projects successfully on a global scale. This will help the company fight water
scarcity and climate change at ground level and improve water supply conditions in the future.
The positive impact of implementing replenishment projects is that it will help the company
create sustainable brand image and positively move towards a greener future of the company on
an international scale. Diageo will be able to attract more consumer by creating such greener
image while also have positive impact on the future by reducing water scarcity through ground
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level replenishment project. The negative impact of this method for addressing the water scarcity
challenge is that collaborating with other business firms can be time taking and also increase the
risk of various projects by increasing possibility of conflict. These solutions will provide the
company competitive advantage as it will eliminate the rising production costs challenge caused
by water scarcity and also provide the firm sustainable brand image which will attract more
consumers to the company.
The future of the climate change, resource scarcity is that as resource depletion continues in
most parts of the world, government agencies, individual consumers, NGO’s and business firms
will make efforts to become more sustainable (Toivonen, 2020). This will affect leaders and
managers in the future as they will focus on implement sustainable leadership and management
practices. In addition to this investment in adopting sustainable solutions will increase as both
small and large business firms will adopt sustainable solutions at different scale to lower their
environmental damage. This will impact leadership and management as one of the primary
responsibilities of leaders and managers of the future will be to ensure that sustainable solutions
and policies provide desired results to business firms.
In order to battle energy scarcity, most business firms will be shifting to using sustainable
energy sources such as nuclear energy or other renewable energy sources. In addition to this with
continuing Urbanization business firms will focus on creating flexible and sustainable supply
chains which can handle the pressure of high demand levels. The role of leaders and managers in
this case will be to supervise smooth functioning of supply chain and ensure that disruptions are
contained to limited area and do not have negative impact on global supply chain of the
company. In case of scarcity of water resources recycling water will be common and many firms
will implement various waste management techniques so that wastage of different resources is
minimized. Leaders and managers in the future will be tasked with minimizing wastage so that
sustainability can be improved.
In addition to this, the megatrend related to resource scarcity and sustainability, accelerated
urbanization will also affects leadership and management in future. This is because it helps
business firms will initiate remote and flexible working policies to deal with the increasing
scarcity in the future because or Urbanization (Trivedi, Trivedi and Goswami, 2018). In this way
the role of leadership and managers will change to support working from home. This change in
the ways in which employees work will be implanted through digital technology. The usage of
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digital technology to support work from him will increase work surveillance and flexibility.
Leaders and managers in the future need to be technologically literate in order to successfully
implement remote working.
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CONCLUSION
From the above essay it is concluded that the megatrend of resource climate and
sustainability is shaping economy and business landscape. It is has created various challenges
related to scarcity of natural resources and threat of climate change affecting global eco-systems.
This megatrend is connected with another megatrend of urbanization and coupled these
megatrends will increase stress of supply chain and introduce resource usage challenges. The
opportunities created by this megatrend is to determine sustainable solutions which can be
applied on a commercial scale to gain global success. The beverage industry is affected by this
megatrend as it has created water supply crises on a global scale. It is important the multinational
firms in the beverage industry adopt water conservation solutions in order to survive with profits
for long time period.
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REFERENCES
Books and Journals
Arno, B.Ã., Blaschke, F. and Biewendt, M., 2021. Impact of Sustainability on the Strategic
Direction of Luxury Companies. European Journal of Economics and Business Studies
Articles, 7.
Gauthier, J. and Zhang, Z. J., 2020. Green knowledge management and strategic renewal: a
discursive perspective on corporate sustainability. International Journal of Productivity
and Performance Management.
Gollnhofer, J. F. and Schouten, J. W., 2017. Complementing the dominant social paradigm with
sustainability. Journal of macromarketing, 37(2). pp.143-152.
Kelleci, A., 2021. Four-Stage Model of Value Creation for Sustainability-Oriented Marketing:
En Route to Participatory Marketing. Journal of Macromarketing,
p.02761467211049668.
Klingenberg, B. and Rothberg, H. N., 2020. The status quo of knowledge management and
sustainability knowledge. Electronic Journal of Knowledge Management, 18(2).
pp.pp136-148.
Mirtchev, A. V., 2021. The Prologue: The Alternative Energy Megatrend in the Age of Great
Power Competition. Post Hill Press.
Mohr, I., Fuxman, L. and Mahmoud, A. B., 2021. A triple-trickle theory for sustainable fashion
adoption: the rise of a luxury trend. Journal of Fashion Marketing and Management: An
International Journal.
Prothero, A. and McDonagh, P., 2021. Ambiguity of purpose and the politics of failure:
Sustainability as macromarketing’s compelling political calling. Journal of
Macromarketing, 41(1). pp.166-171.
Samuel and et. al., 2021. Experiencing the Macromarketing Dimensions of Sustainability:
Lessons Learned From Field Trips to the Ultra Novel. Journal of Marketing Education,
p.02734753211049825.
Sheth, J. N. and Parvatiyar, A., 2021. Sustainable marketing: Market-driving, not market-
driven. Journal of macromarketing, 41(1). pp.150-165.
Toivonen, A., 2020. Sustainability dimensions in space tourism: the case of Finland. Journal of
Sustainable Tourism, pp.1-17.
Trivedi, K., Trivedi, P. and Goswami, V., 2018. Sustainable marketing strategies: Creating
business value by meeting consumer expectation. International Journal of Management,
Economics and Social Sciences (IJMESS), 7(2), pp.186-205.
Online
Global risks report 2020: These are the top risks facing the world, 2020. [Online] Available
through https://www.weforum.org/agenda/2020/01/top-global-risks-report-climate-
change-cyberattacks-economic-political/
The Tesla Of Smart Cities? Pavegen's On A £5m Mission To Supercharge Your Sidewalks,
2018. [Online] Available through
https://www.forbes.com/sites/kittyknowles/2018/03/27/the-tesla-of-smart-cities-inside-
pavegens-5m-mission-to-supercharge-your-sidewalks/?sh=2fab2df15c00
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