Rattling Supply Chains

The report introduces the "Ecoflation" scenario, where environmental costs are internalized into business operations due to policy and resource constraints. For FMCG companies that do not adapt, the report estimates significant reductions in earnings before interest and taxes (EBIT), ranging from 13-31% by 2013 and 19-47% by 2018. The analysis highlights the volatility of commodity prices and the degradation of natural ecosystems, suggesting that companies must implement structural changes, such as product innovation and restructured value chains, to mitigate these risks.

• The "Ecoflation" scenario predicts that FMCG companies failing to develop strategies for environmental pressures will see a reduction in earnings before interest and taxes (EBIT) of 13-31 percent by 2013 and 19-47 percent by 2018.
• Global commodity prices experienced sharp increases between 2006 and 2008, with oil rising by 110%, rice by 217%, wheat by 136%, maize by 125%, and soybeans by 107%.
• Natural ecosystems are under significant pressure, with approximately 60% of their benefits being degraded or used unsustainably, and 20% of freshwater use exceeding long-term sustainable supply.
• The Ecoflation scenario is based on a combination of more stringent climate change regulations, enforceable forest policies, water scarcity in agricultural regions, biofuel policies, and increased consumer demand for green products.
• To mitigate environmental risks, companies are advised to examine cost drivers, inventory current value chain initiatives, rank issues by impact on costs and reputation, and embed sustainability principles into action plans.

APA

World Resources Institute (n.d.). Rattling Supply Chains. https://www.wri.org/research/rattling-supply-chains

Chicago

World Resources Institute. Rattling Supply Chains. n.d. https://www.wri.org/research/rattling-supply-chains.

Wikipedia

{{cite report |author=World Resources Institute |title=Rattling Supply Chains |url=https://www.wri.org/research/rattling-supply-chains |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendrattling, author = {{World Resources Institute}}, title = {{Rattling Supply Chains}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/rattling-supply-chains}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }