Environmental Productivity accounts for the efficiency with which companies use and impact natural resources. Terra Alpha developed Environmental Productivity as a proprietary measurement to gauge how effectively companies will be able to navigate a future marked by natural-resource constraints across the global economic system.
The world today faces a complex array of natural resource challenges. Global growth is driving ever higher levels of resource consumption, causing record totals of carbon emissions, shortages of fresh water and raw materials, and greater magnitudes of waste.
Companies that fail to adapt are at risk; those that recognize these challenges can capitalize by improving their carbon, water, and material efficiency.
The world has entered an era of unprecedented energy demand and production. Companies that diversify their energy sources, improve efficiency, and reduce emissions will be better positioned to provide long-term investment returns in a future replete with fluctuating prices, uncertain regulatory environments, and political and economic instability.
*Greenhouse gas emissions as expressed by carbon dioxide equivalent (CO2e)
Limited or no access to water - what was once a distant concept to businesses - has now become reality for many and a near-term challenge globally. Global water resources are becoming increasingly stressed, and the impacts of this stress reach across all sectors. Competition for water can disrupt operations, damage reputation, and constrain growth. Companies that proactively assess the exposure of both their direct operations and global supply chain to water-associated risks will have a competitive advantage over their peers and be more successful in the long term.
Material extraction and waste generation are both increasing as global consumption grows. The idea of production with the end use, impact, and any residual in mind - a “circular economy” - can increase resource availability for production and create value throughout a company’s operations. Companies that can reduce material extraction, achieve little to no waste during processing, and recycle, reuse, or resell what is leftover, will realize considerable positive returns and limit their exposure to resource scarcity in the future.
At Terra Alpha, we work to demonstrate that environmentally productive business practices enhance long-term returns for businesses and patient capital investors, and advocate for the more rapid adoption of Environmental Productivity across the global economic system.