The only constant is change

Geopolitics, technology, society and the environment affect companies and define the scope within which they can act. The past decade has resulted in numerous changes to the relevant parameters of the business environment. Companies that anticipated the changes and reacted in good time were able to profit by focusing their corporate strategy consistently on global trends. For example, technology companies have benefited greatly from digitalization and the increasing virtualization of processes. The world's most highly valued companies include well-known technology conglomerates.

And the environment for companies continues to change. In particular, the COVID-19 pandemic is forcing company leaders to rethink future developments and strategic focuses.

What might the business environment be like in ten years?

With respect to the European Union, renewable energies as a share of total energy consumption in the EU will be around 40% by 2030. This will result in a massive change to the energy supply system. According to the current report of the Intergovernmental Panel on Climate Change (IPCC), there is a high likelihood that Earth will warm by 1.5 degrees compared with pre-industrial society by 2030 (Climate Change 2021). Some of the consequences of this warming including scarcity of fresh water, dry conditions, severe weather risks and more. In turn, this will have an impact on biodiversity, the food supply, the availability of raw materials and technologies. These interdependencies show that it is essential for companies to think about the future and to review and reconsider their own strategies in light of these changes.

Forward-thinking companies need to ask themselves the following questions:

  • What do these changes – both in the environmental and the social realm – mean for my company?
  • In what areas does my company need to act?

Global forces shape the future business environment of companies

There are five main forces driving the environment and society and thus the business environment (Global Environment Outlook 6 | UNEP). Anticipating the future means understanding the consequences of each.

There are currently 8.5 million people in Switzerland. There may be 9.4 million by 2030. This is a growth rate of 10%*.

  • The global population will increase from nearly 7.8 billion people now to about 8.6 billion by 2030, meaning there will be greater pressure on environmental elements if parameters don't change, driven, in particular, by higher consumption.
  • The population is mainly growing in countries with low incomes, which already have significant inequality in terms of access to education, work and gender equality. This inequality will continue to worsen.  The expected aging of the global population will have various social and environmental consequences.


*Global Environment Outlook 6 | UNEP

Three planets would be needed if everyone wanted to live like a Swiss citizen*.

  • Economic growth plays a key role in combating poverty, creating social equality and achieving peace, particularly in light of the forecast population increase.
  • The UN estimates that the COVID-19 pandemic will result in more than 200 million more people living in poverty by 2030. 
  • Although the goal for 2030 was to eliminate extreme forms of child labor, it is assumed that the COVID-19 pandemic will result in a setback.
  • Economic development is tied to increased consumption and the corresponding environment impact.


Switzerland's ecological footprint | Federal Statistical Office

There are around 8-10 smartphones per household lying around as electronic waste in Switzerland.

  •  Technological innovation is a driver of economic growth and productivity improvements by, among other things, producing more with existing resources and thus addressing environmental problems.
  • Rapid technological successes, particularly in the area of energy supply, are crucial for combating climate change. However, innovation is also critical in the area of food production in order to provide sustenance to a growing population.
  • Technological development can also have negative consequences, however. Examples include the cautious approach to new technologies, such as artificial intelligence and electronic waste.

In Switzerland, the average temperature has risen by about two degrees since the pre-industrial era – around twice the global average*.

  • The world has undertaken to combat climate change. However, irreversible changes are already under way.
  • The Earth has warmed by 1.1 degrees since the pre-industrial era.
  • The likelihood of extreme weather events, such as floods, storms and droughts as well as other physical risks, is increasing and have a direct impact on various environmental aspects, such as the availability of fresh water and economic development. The situation will worsen by 2030, according to the IPCC.
  • Climate change is having a negative impact on health and leading to migration pressure and additional urbanization.


*  Climate change in Switzerland

Three-fourths of all people live in cities or the areas directly around them*.

  • More than half the world's population now lives in cities. This trend will continue to grow – reaching about three-fifths by 2030.
  • Urban areas offer higher incomes as well as the ideal conditions for innovation and economic growth. But they also exert significant pressure on the environment and society. Around one-third of the population in urban areas live in slum-like conditions.
  • Cities have the potential for efficiency and the implementation of various sustainability measures.


Urban and rural areas

These effects will lead to changes that cannot be ignored by the economy and companies: A scarcity of resources, a lack of fresh water, social inequality, loss of biodiversity, food insecurity and much more. A fundamental transformation toward sustainable development can only succeed with holistic solutions. Politicians are trying to get the environment on the right track by implementing the corresponding measures.

UN-Agenda 2030 for a sustainable future

With its 17 Sustainable Development Goals (SDGs) it published in 2015, the United Nations set forward-looking goals for socially, economically, and environmentally sustainable development to be achieved by all UN member states by 2030. The 17 goals focus on the most urgent challenges of our time and provide politicians with a framework for action. The SDGs are intended to offer companies a basis for setting their corporate strategy.

Developments in Switzerland (2030 SDS)

The Swiss Federal Council outlined the political implementation of the SDGs in Switzerland in its sustainability development strategy (2030 SDS). In this strategy it formulated guidelines for future federal policy and set goals for 2030 as well as domestic and foreign strategic thrusts with corresponding political focal points. Thus, companies can already get an idea of what to expect in these areas and make corresponding adjustments.

Focal points

  1. Sustainable consumption and sustainable production
  2. Climate, energy and biodiversity
  3. Equal opportunity and social cohesion

An action plan for the years 2021 to 2023 fleshes out the sustainability strategy 2030 with selected new measures at the federal level, which are to be defined taking account of existing political programs. As a result, these changes will also affect the operational environment of companies, a fact that needs to be recognized. Because this is the only way to take advantage of opportunities and counteract risks in a timely manner.

No one can hide

Although there is a lot of uncertainty and a number of sustainability goals appear to be unachievable at present, recent political activities (for example, at the EU level) as well as increasing social awareness and the related changes in consumer preferences show that the framework conditions for companies are changing fundamentally.

A well-considered view of the future is essential for a successful and responsible strategic focus by companies. Long-term scenarios can show what key environmental parameters may look like in the future. For example, corporate decisions may be made taking account of economic, social and environmental developments, for example, when investing in infrastructure, intellectual property or technologies.

Companies with water-intensive production processes will have to ask themselves how they will be able to deal with increasing shortages or displacement of the corresponding resources. The important thing here is to work with different scenarios in order to test the resilience of the selected strategy compared with alternative developments. There will be different opportunities and risks depending on developments. One thing is clear – the changes will affect all companies.

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Silvan Jurt

Silvan Jurt

Partner, Head Corporate Sustainability Services, Audit Corporate

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