Archive for the 'Economy' Category

Corporate Insolvencies Falling

Published on October 5, 2010 in Economy. 0 Comments

Yet again…good news-bad news time!

PwC reports that the number of firms becoming insolvent is falling once again (18% less than previous quarter, 20% less than last year) which has to be seen as positive across the economy.

There is still significant uncertainty among both small and larger business as to what the impacts of the Government’s spending review (20th October – not long to go now) will be, although the construction and service sectors are expected to be greatest hit.

Uncertainty at this stage is unavoidable; however, once we all know a little more about where we stand then decisions need to be made, and quickly. No doubt some organisations will suffer badly, but some will actually gain once the uncertainty is gone.

The fact is, whether an organisation is growing or shrinking, then strategy planning, financial analysis and execution of the plan must follow rapidly.

Change needs planning, and change needs managing. Muddling through these tough times is not a viable option for anybody wishing to avoid the insolvency statistics. There is one thing worse than making the wrong decision, and that’s making no decision at all…

Is Water the New Carbon?

Published on August 19, 2010 in Economy. 0 Comments

It will be no news to anyone that corporate sustainability and environmental concerns have so far centred around carbon release and oil/gas longevity. However, at least in some areas of the world, a more localised problem is the usage and (actual or potential) shortage of water.

This issue of ‘water footprinting’ is likely to become as important as’ carbon footprinting’. Like any other scarce resource (Oil? Money? Time? Skilled workforce?), governments, organisations and society as a whole are becoming more aware of the issues. Although of course water is a fully renewable resource, its distribution and management is far from easy.

Risks may arise from excesses (flooding), shortfalls (in either water as a whole, or specifically clean water) and the security of supplies. Financial issues revolve around direct pricing (supply and demand, from an economic perspective) but also the indirect impact of any other issue, for instance lost production. As with almost any risk, there is a financial impact if it occurs, and it is this aspect alongside society issues, that businesses need to be concerned about.

What should business be doing?

Unlike many other materials, its supply is unpredictable but taken for granted by many. Its price may appear to far understate its value, although this is only evident when its supply is disrupted. Business should strive to become more aware of its water footprint – although the concept is relatively new, some companies already publish water footprint statistics.

Methodologies are available from Chapagain and Hoekstra, the WBCSD and The Water Footprint Network. There are not, as yet, any agreed standards for measurement and management.

Clearly, measurement is not enough if significant issues occur – the benefit of measurement is in being able to utilise it to manage a reduction in water usage, and therefore reliance, which in turn will reduce the risks that organisations are exposed to. This is not just an issue for agriculture and commodity production, but an issue globally. Developments will be interesting to follow.