Big4.com Reports on KPMG’s Recommendations for Sustainable Growth

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The KPMG research identified that the external environmental costs of 11 key industry sectors had jumped 50 percent from US$566 billion to US$846 billion in eight years.

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The KPMG report calculated that if companies had to pay for the full environmental costs of their production, they would lose 41 cents for every $1 in earnings on average.

Big4.com, the premier social networking forum for professionals and alumni of Accenture, Andersen, BearingPoint, Capgemini, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers PwC reviewed recent recommendations from KPMG for sustainable growth in a report titled, “Business Perspective on Sustainable Growth: Preparing for Rio+20” global summit. Summit attendees agreed to the recommendations as part of the meeting’s goal of providing business input to Rio+20, the upcoming global policy summit in June.

Yvo de Boer, KPMG’s Special Global Advisor on Climate Change and Sustainability noted that the meeting’s findings included near-unanimous recommendations for Rio+20. Among them were directions to policy leaders, who should:

Provide long-term, stable and transparent policy frameworks and incentives to scale-up investment in sustainable development.

Provide strong price signals on resource scarcity and environmental impacts in order to drive investment in sustainable growth.

Deliver new platforms for public-private collaboration at the international and national levels.

“Today’s leaders are struggling with complexity. Until now, we found global trends on energy, water security and food scarcity complex enough,” de Boer said. “The convergence of other forces such as population growth, deforestation and a surging middle class is impacting business and the world around us. Leaders are overwhelmed by the sheer scale of these problems and struggling to act. There are ways to solve these problems, and that includes harnessing the capacity of business.”

The Summit included recommendations for business to:

Reduce its focus on short-term performance in favor of longer term sustainable growth.

Adopt stretching sustainability targets – for example to reduce water, energy and material use – in order to drive innovation.

Central to the three days of discussion was a KPMG report, Expect the Unexpected: Building Business Value in a Changing World, which identifies the 10 megatrends that may impact business and industry.

The KPMG research identified that the external environmental costs of 11 key industry sectors had jumped 50 percent from US$566 billion to US$846 billion in eight years (2002 to 2010), averaging a doubling of these costs every 14 years. Such external costs often are not reflected on financial statements because they may be items borne either by individuals or society at large, and are often both non-monetary and problematic to quantify for comparison with monetary values, such as the effects of pollution.

The KPMG report calculated that if companies had to pay for the full environmental costs of their production, they would lose 41 cents for every $1 in earnings on average.

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Kristy Short
Big4.com
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