Research highlights environmental impact on design

by Staff, Brand Republic 03-Dec-08, 14:30

LONDON - Packaged goods companies need to think about redesigning products and upgrading sustainability standards in light of costly future environmental trends, according to a US research report.

The report, which posits a scenario of "ecoflation" over the next ten years, was authored by management consultancy AT Kearney and the non-policy research organisation World Resources Institute.

It claims consumer goods companies' earnings will be vulnerable to increasing costs in their supply chain as a result of both commodity scarcity and costlier environmental regulation.

The report contains analysis of how these factors might affect the prices of selected commodities including oil, sugar and timber.

Daniel Mahler, a partner at AT Kearney, said: "The results highlight the need for strategic scenario-based planning. Winning companies will anticipate this changing landscape. These companies will collaborate with suppliers and other stakeholders, and make environmental sustainability a key business [principle]."

Companies are advised to develop a supply chain strategy that includes reducing cost exposure to critical input commodities by redesigning products and improving sustainability standards.

The full report can be accessed from the AT Kearney website.