As civil society, government and business leaders wake up to the immediacy of the threat of declining natural capital a widespread reassessment of the values underpinning society, the purpose of the corporation and the current predominant economy is inevitable.
This reassessment will be enshrined legally by global treaties and national legislation.
For more on Protection, including political intervention, disruption of supply chains, and disputes over territory and resources, see Forces for Change
Changing regulations and policies
Business is facing a more complex regulatory and policy landscape as the Government seeks to address pressing environmental and social challenges. For example within the energy market a range of EU and UK regulations are shaping the economics of supply and demand:
Energy market reform is changing the incentives for renewables and nuclear as the Government seeks to balance security of supply and climate change concerns.
The Green Deal seeks to create a new market for UK domestic energy efficiency services.
45% of emissions (principally from industry) are covered by the EU Emissions Trading Scheme (EU ETS), with legislation in place to lower the availability of free permits, moving towards auctioning of allowances. [i]
Regulation is also shaping other areas of the market, for example:
Recent UK legislation on automatic pension enrolment seeks to address the challenges of the aging society and places new obligations on business. [ii]
The standard landfill tax rate for 2014 in the UK is proposed to be £80 per tonne of waste, a rise of 25% on the current rate, increasing the costs of waste disposal. [iii]
In 2012 the UK Government announced it would be the first Government in the world to require all listed companies on the main market of the London Stock Exchange to disclose their greenhouse gas emissions in their annual reports. [iv]
The recently launched Global Oceans legacy is an international collaboration to create designated areas around the globe where fishing and excreted activities are prohibited to protect our already fragile oceans. Our oceanic resources are not limited to boundaries and the halting of over-fishing is an increasing international focus, and businesses have to keep ahead of international policies regulating their trade.
Protecting the rate of finite materials and resources extracted for commercial use is increasingly understood as an international concern. Governing bodies, charities and multinational companies understand that this sort of collaboration is essential to protecting and regulating finite resources. The new listings of species and the 165 Decisions and 36 Resolutions adopted or revised at the 16th meeting of the Conference of the Parties to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in Bangkok in March 2013 entered into force on Wednesday 12 June. As a result, the 178 member countries will start regulating the international trade in over 300 new species now protected by CITES. [v]
Many CEOs believe that there is a need for greater clarity around the shape and scope of future regulation in the light of the major social and environment challenges we face today.
A complex and changing policy and regulatory landscape may create new obligations, costs and potential opportunities for business.