Society and businesses are becoming increasingly aware that the resources needed for products are not infinite. There is growing pressure on the availability of resources due to a variety of factors including the expected increase in global consumption of goods spurred by a growing global middle class. Unfortunately, current economic practices that follow a ‘take-make-waste’ approach – what we term the ‘linear economy’ – do not focus on preserving the value of resources and more effectively utilising them in order to relieve this pressure. As a result, there are a variety of business risks that arise from adhering to a linear economy mindset. These risks stem from future resource shortages and associated impacts on prices, supply continuity and market dynamics if we continue to follow a business-as-usual approach.
This essay aims to introduce the various business risks of common ‘linear economy’ business practices and start a dialogue with the financial and business community about their implications.
Building on this essay, we wish to explore further directions to better understand and model them. We hope that these risks will one day become an integral part of investment decisions to ensure better investment decisions that achieve long-term stability and growth.
