Environment

Packaged goods companies must introduce sustainable environmental strategies or risk a 30% fall in income by 2013 and up to a 50% drop by 2018, according to new report from management consultancy AT Kearney and think-tank World Resources Group.

The report, which posits a scenario of "ecoflation" over the next ten years, claims that consumer goods companies' will be vulnerable to increasing costs in their supply chain as a result of both commodity scarcity and costlier environmental regulation.

It advises companies to think about redesigning products and upgrading sustainability standards in light of costly future environmental trends.

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."

The report advises companies to prioritise risks by ranking environmental challenges according to their current and future impact on costs, revenue and reputation.

The full report can be accessed here.