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Global leaders tackle growing strain on natural resources

A child drinks water from a WASA run tube well, at a slum in Rayer Bazaar, in Dhaka, Bangladesh.
A child drinks water from a WASA run tube well, at a slum in Rayer Bazaar, in Dhaka, Bangladesh.Majority World | UIG / Getty Images

With demand for resources such as food, water and rare earth minerals expected to continue to rise, companies and governments are trying to find sustainable ways for supplies to keep up with a growing population of consumers.

This year's weeklong Clinton Global Initiative's annual meeting will bring together more than 1,000 global leaders—some 60 current and former heads of state, including President Barack Obama, along with NGO and philanthropy leaders from over 70 nations— to brainstorm ways to head off increasing strains on the natural resources that keep the global economy on track.

Read more: Clinton Global Initiative is 'mobilizing for impact'

They have a lot of work ahead of them, based on the main finding of a recent survey conducted for the U.N. Global Compact, the world's largest corporate initiative to develop a more sustainable global economy. The survey of more than 1,000 CEOs across the world—the largest of its kind ever conducted— found that two-thirds believe the global economy is not on track to meet the demands of a growing population.

Despite wider awareness of the need to adopt sustainable practices, "business efforts on sustainability may have plateaued," according to the report, conducted by Accenture and released Friday.

In the short term, the tough economic climate has made it tougher for businesses to justify these investments. But the long-term outlook hasn't changed, according to Craig Hanson, director of the People and Ecosystems Program at the World Resources Institute. 

Read more: A hungry world: Lots of food, in too few places

"The outlook does look dire for many types of natural resources if we continue on the status quo," he said. "The tough issue is that many of the places that face those resource constraints don't have the technical or human capacity to adjust and deal with an acute shortage."

But corporate CEOs report that they're having a harder time justifying the investment in overhauling their supply chains to promote sustainability. "Signals from consumers are mixed" and "investor interest is patchy," according to the U.N. Global Compact study.

Global businesses may also feel less urgency to advance sustainability when sluggish economic growth has eased the upward pressure on supplies of raw materials and commodity prices. 

German software giant SAP is among a broad range of companies helping businesses and governments apply new processes and technologies to squeeze more efficiency out of a variety of resource supply chains. Rapid advances in data analytics, for example, are helping track down and reduce waste. 

"There is always the hope that you'll find more," said Peter Graf, chief sustainability officer at SAP, one of the companies participating in the Clinton Global Initiative conference. "Mankind has become more and more sophisticated over the last 100 years to go and exploit those resources. The problem right now is that demand is outgrowing our ability to find new resources." 

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The relentless growth of human population in the modern world has brought dire warnings of resource shortages ever since British economist Thomas Malthus more than 200 years ago predicted that overpopulation would bring a catastrophic famine. 

Since then, tight supplies of raw materials and commodities have typically spurred investment in new production, and research in efficiency and substitution of cheaper materials have helped head off shortages. As a result, for much of the last century, the global economy was fueled by a seemingly endless supply of cheap, abundant raw materials. 

But the rapid expansion of the global pool of middle-class consumers is straining the world's supplies of natural resources. "It's not the total number of people, it's the number in the consuming class," said Fraser Thompson, a senior fellow at the McKinsey Global Institute, co-author of a 2011 report on resource sustainability. "That's where the real transformational change is happening." 

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The numbers are stark. While the current world population of about 7 billion is projected to top 8 billion by 2030, almost all of that growth is expected to come in the developing world. That means the current population of consumers— people with more than $10 a day to spend— is expected to more than double from 1.8 billion to 4.8 billion.

Still, experts in sustainability say the story of the human race doesn't have to end badly.

After dire predictions of "peak" oil a decade ago, for example, rising energy prices spurred investment in new production. New technologies prompted a boom in production of "unconventional" shale deposits. Consumers have switched to higher efficiency cars, bending the demand curve for gasoline, which has been in decline since 2007.

But the solutions to energy shortages are more difficult to apply to resources like water or food, especially in the developing world where demand is expected to grow even more rapidly than at any time in history.

One solution is to use a much larger share of resources more than once. "The only way out of that is the way we design products (for recycling) in the first place," according to SAP's Graf. "Because a lot of what we do right now ends up in landfills."

Those technologies have the potential to substantially alter the projections of looming shortages, according to Fernando Miralles, a hydrologist at the Inter-American Development Bank.

"What people fail to consider is that these trends will drive the development of different approaches and different technologies that will help solve the problem," said Miralles. 

"Trying to say that you're doomed because you're not going to be able to solve it with today's technology is a self-defeating premise."

—By CNBC's John W. Schoen. Follow him on Twitter @johnwschoen.