Element Magazine - July 2014 Element Magazine - July 2014

By Penny Nelson, executive director, Sustainable Business Council A large group of New Zealand businesses have a vision for how New Zealand should look by the middle of this century. By 2050 Sustainable Business Council members want all New Zealanders living well and within the limits of the planet. There really is no other choice. The New Zealand goal aligns with a global vision developed by the World Business Council for Sustainable Development, which has over 200 member businesses and partner organisations in 66 countries. Four years ago it published the ground-breaking Vision2050 report – the ﬁrst time global companies have publicly come together to say that business as usual is no longer an option. We will all need to make signiﬁcant changes to how we produce and consume everything from energy to agriculture products if we want the projected nine billion people to be able to live well and within the limits of the planet by 2050. But when businesses change the way they operate, that will also create a raft of opportunities. Whole new industries will emerge that support lowcarbon, zero-waste cities; there will be new business opportunities to improve and manage ecosystems, livelihoods and lifestyles. The World Business Council for Sustainable Development estimates that those opportunities will be worth somewhere between US$3-10 trillion USD every year by 2050. However, a 35-year transformation doesn’t just happen. We need waypoints. That’s why the World Business Council for Sustainable Development has more recently developed Action2020 – a plan that looks at the difference we can make over the next six years. The international scientiﬁc community was essential in drawing up short term activities so that we are able to reach the aspirational mid-century goals. For example, it set a target of limiting cumulative net emissions to a trillion tonnes of carbon, which aims to keep global temperatures to just two degrees above pre-industrial levels by 2050. A growing number of New Zealand businesses are playing their part in these global plans. Companies focused on our own Vision2050 plan make up almost a third of New Zealand’s private sector GDP with a collective turnover of about $63 billion. That’s a lot of sway from a group of businesses who are already doing more to make sure New Zealand has a strong, vibrant economy, where innovation is the norm, where our clean, green image is intact and communities prosper. By Jackie Robertson, assurance partner, Deloitte New Zealand What would a sustainable New Zealand look like? Most would agree it would include a well-educated and healthy population, a successful economy, vibrant communities and a healthy natural environment. But while these aspects of our lives are dependent upon each other, governments mainly focus on quantitative economic statistics such as GDP growth, communities mainly focus on their current needs and corporates mainly focus on short-to-medium-term proﬁts. Few focus on the health of the ecosystems that all this depends on. New Zealand, more than most, is dependent on looking after its natural environment for its long-term success. There are encouraging signs of change. There is growing evidence suggesting businesses that proactively manage their impacts on society and the environment achieve broader beneﬁts and competitive advantages than just brand protection and risk management. These include: attraction of talented staff; securing access to resources; 12 element anticipation or avoidance of regulation; and identifying new business opportunities. Companies that have this holistic view of the environment and the society in which they operate, and use it to determine business strategy, achieve better longterm returns for shareholders. Investors also recognise the importance of having transparent, focused and quality information about how companies manage the risks and opportunities associated with broader environmental and social impacts. Until recently this information has only been provided on a voluntary basis but capital markets, including those in places like South Africa, Australia and the European Union, have now started to ask for aspects of this information to be disclosed as part of the listing rules. As an accountant I have always liked the fundamental principle of ‘what gets measured gets managed’. Our own New Zealand Action2020 plan is still being developed. We’ll be sharing our short term plan later this year – around the same time ASEAN partners to the World Business Council for Sustainable Development launch what they will do. Over the past year a handful of leading companies have started exploring how dependent they are, and the impact they have on the environment using the World Business Council for Sustainable Development’s Ecosystem Service Review Tool. Six months from now, those companies will be able to share what they have learned from having a much greater understanding of how they interact with the environment. Bringing in more mandatory reporting of how companies are managing their sustainability issues, and how they are performing in these areas, is a step in the right direction. The challenge will be in understanding what sustainability impacts a company actually has and developing meaningful measures of corporate performance. Boards need to get involved to ensure a company’s sustainability philosophy is integrated into i

Element Magazine - July 2014 Element Magazine - July 2014 | Page 12