With little debate on the fact that we have reached the bottom of the global downturn and are entering a period of resurgent growth, there is however, a differing of opinion on the speed, location, and stability of economic prosperity. The CFO Magazine article, The Great Divide, explores what the post describes as the look and feel of the economic recovery. Examining the wide range in growth by global region, the article examines two extremes:
• Less-Potent Recovery for mature economies like the United States and most of Europe
• Extra-Strength Recovery for emerging markets like India, Hong Kong, and Argentina
For companies actively engaged or seeking engagement in these markets, many business sustainability concerns come to mind. CFO Magazine poses two interesting and timely questions to any business building a sustainable global growth strategy.
• Will you use cash to aggressively expand operations in emerging markets?
• What might pose the greatest business sustainability risk to this aggressive strategy?
Pursuant an accelerated growth business strategy, companies must apply traditional business sustainability questions to lesser-defined markets. By this we mean, a stable company must strategically plan for a variety of unknowns and lack of control in the business growth equation. Operating in a less monitored and regulated environment, several business sustainability questions immediately come to mind:
• What will be the source local materials?
• What will be the manner in which they are obtained?
• What will be the business practices and standards by which the emerging market supply partners conduct their business?
• What will be the environmental and social impacts of these new supplier’s operations?
• How might emerging market practices affect mature market operations and product offerings?
Working directly with business leaders in the midst of recovery, our sustainability consulting practice has observed how business sustainability risk can affect every aspect of a company and its stakeholders. While many traditional business sustainability threats may appear obvious in retrospect, some hidden and intangible risks may yet to have presented themselves. Our experience tells us that the unforeseen sustainability challenges of emerging markets are just beginning to present themselves to the business sustainability risk-minded.