GMAT Reading Comprehension
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Source: GWD
Level: 3
Eco efficiency (measures to minimize environmental impact through the reduction or elimination of waste from production processes) has become a goal for companies worldwide, with many realizing significant cost savings from such innovations. Peter Senge and Goran Carstedt see this development as laudable but suggest that simply adopting eco efficiency innovations could actually worsen environmental stresses in the future. Such innovations reduce production waste but do not alter the number of products manufactured nor the waste generated from their use and discard; indeed, most companies invest in eco efficiency improvements in order to increase profits and growth. Moreover, there is no guarantee that increased economic growth from eco efficiency will come in similarly eco efficient ways, since in today's global markets, greater profits may be turned into investment capital that could easily be reinvested in old-style eco-inefficient industries. Even a vastly more eco efficient industrial system could, were it to grow much larger, generate more total waste and destroy more habitat and species than would a smaller, less eco efficient economy. Senge and Carstedt argue that to preserve the global environment and sustain economic growth, businesses must develop a new systemic approach that reduces total material use and total accumulated waste. Focusing exclusively on eco efficiency, which offers a compelling business case according to established thinking, may distract companies from pursuing radically different products and business models.
The passage implies that which of the following is a possible consequence of a company's adoption of innovations that increase its eco efficiency?
- A Company profits resulting from such innovations may be reinvested in that company with no guarantee that the company will continue to make further improvements in eco efficiency.
- B Company growth fostered by cost savings from such innovations may allow that company to manufacture a greater number of products that will be used and discarded, thus worsening environmental stress.
- C A company that fails to realize significant cost savings from such innovations may have little incentive to continue to minimize the environmental impact of its production processes.
- D A company that comes to depend on such innovations to increase its profits and growth may be vulnerable in the global market to competition from old-style eco-inefficient industries.
- E A company that meets its eco efficiency goals is unlikely to invest its increased profits in the development of new and innovative eco efficiency measures.