close
Share with your friends

22 January 2020

Just 20 years into the 21st Century, we have already seen remarkable changes that we could never have anticipated. We’ve come up with 20 predictions that explore what the next 20 years may have in store for your organisation.

Prediction 16

As the climate crisis continues, the regulatory response will shift markedly. Pollution, loss of biodiversity, drought and flooding all signal that the world is heading down an unsustainable path.

Pressure from scientists and civil society, as well as the commitments made at the Paris Climate Conference in 2015, are already driving a shift in policy. Now, regulation is set to move from revolving around voluntary actions and soft policy initiatives to a more strident approach. This will affect all industries.

While this trend will not be seen in every country, international pressure and the domino effect of countries adopting a new regulatory approach as they commit to becoming carbon neutral within 30 years – if not less – will see it spread rapidly.

Environmental impact will become the key regulatory factor across all industries – from the pollution emitted by the transport industry to the activities of financial services in investing in non-sustainable environmental activities – and this will transform our economy.

Meanwhile, new technologies will also help us monitor and manage environmental impact. Drones, sensors and AI will increasingly detect sources of pollution emission more accurately and quickly. AI will also help us to work out how to manage natural resources. We will be able to make regulatory changes quickly to reflect these real-time insights.

Trends in environmental regulation

Impact

Environmental regulation will become more strident. It will also be enforced more rigorously to ensure that environmental policy objectives are achieved.

This will lead to some businesses being forced to change the way they operate – and, more fundamentally, their business model and their strategy. New sustainable products, service lines and processes will emerge from this shift.

Organisations will move towards recycling, embrace renewable sources and work to dramatically reduce the carbon footprint of their end-to-end processes and outputs.

Curious to find out what else could happen between now and 2040? Read our other predictions

KPMG does not make any statement in this article as to whether any forecasts or projections included in this article will be achieved, or whether the assumptions and data underlying any prospective economic forecasts or projections are accurate, complete or reasonable. KPMG does not warrant or guarantee the achievement of any such forecasts or projections. Any economic projections or forecasts in this report rely on economic inputs that are subject to unavoidable statistical variation. They also rely on economic parameters that are subject to unavoidable statistical variation. While all care has been taken to account for statistical variation, care should be taken whenever considering or using this information. There will usually be differences between forecast or projected and actual results, because events and circumstances frequently do not occur as expected or predicted, and those differences may be material. Any estimates or projections will only take into account information available to KPMG up to the date of this report and so findings may be affected by new information. Events may have occurred since this article was prepared, which may impact on it and its findings.

The information contained herein is of a general nature and is not intended to address the specific circumstances of any particular individual or entity.

To the extent permissible by law, KPMG and its associated entities shall not be liable for any errors, omissions, defects or misrepresentations in the information or for any loss or damage suffered by persons who use or rely on such information (including for reasons of negligence, negligent misstatement or otherwise).