11 predictions for NZ sustainable business in 2016.
19 Jan 2016
Find out what’s on the cards for sustainable business in New Zealand this year with these predictions from 11 business leaders across our Network.
Sean Kelly, CEO, Hubbards Foods
“I believe we are at a tipping point of global change.”
The Paris Agreement is a meaningful step forward, which is causing climate change to be faced up to at the highest level. At the same time the voice of many is growing stronger with a groundswell of global social media users, whose opinions are clearly asking for governments and businesses to be socially responsible. On the New Zealand front I see the pending El Nino summer as a significant stress. The farmers who are already struggling under falls in global milk prices will be hit again. This will cause some soul searching for New Zealand on its reliance on dairy production, and the way the industry interacts with the environment.
Marty Forsman, Sustainability Manager, Air New Zealand
“Key issues for 2016 will be climate change, the burgeoning middle class, business’ social connection and the demand for transparency.”
Unable to be usurped, climate change is the issue of our time. An eternal optimist, I was relieved and even surprised with outcomes from COP21. This now translates to a challenge for countries, business and individuals to decouple growth from carbon emissions.
Burgeoning middle class/sustainable development
Within six years more people globally will be middle class than poor. For New Zealand, we need to consider how this will impact our tourism proposition and how we not only preserve our unique identity but ensure it is available to all New Zealanders.
Business’ social connection
Uncertainty is beginning to evolve into an understanding of how business purpose connects to staff and its communities. Based on the tenet of interdependence, the prize is creating long-term relationships and loyalty.
Demand for transparency
Although not new, the pace of this change through social media is staggering. Customers and society demand more than ever that business be held accountable. Get you backyard in order.
Rachael Le Mesurier, Executive Director, Oxfam New Zealand
“Sustainability and NGOs will become a larger discussion in 2016 as more non-government organisations/not for profits/charities recognise how disruption, particularly technology, is impacting on our current business models.”
Challenges are inherent in our traditional focus on keeping overheads down – resulting in very little funds to innovate and adapt to respond to these external changes. In the charitable sector our business model is ‘sold’ to the public as worthy because we aim for a 25/75 split – dividing off the overheads from the total cost of the project, programme or service.
Interestingly, successful businesses rarely have to justify to their customers the amount they have spent on investing in designing, testing, evaluating and monitoring their services, yet NGOs are deemed to be ‘clipping the ticket’ when we do just the same. This results in us being at risk of sub-standard quality, transparency and evaluation processes – as they are not deemed to be integral to the programme or project donors wish to fund, not in the 75 per cent.
Nor is it deemed acceptable at year end that there is a surplus (or a deficit due to investment) in the not for profit’s accounts – despite how effective the charity may be at achieving its aims. We have built this sector called ‘not for profit’ so we’re reaping what we have sowed.
Similarly we are at risk if we keep ourselves limited to the fundraising/government contract model. When government strategy changes we can be left high and dry – complaining that the ‘government should fund’ our worthy cause is not the basis for a sustainable organisation.
In many cases the answers to these challenges are with the partners in low income communities and countries we work alongside – they don’t label a social good-driven activity as a charity, a business or a social enterprise (in many cases the low income nations don’t have the historical ‘philanthropic’ baggage richer nations have) – they just get on with developing a model that will sustain it.
Adele Rose, Chief Executive, 3R Group
“The spotlight will increasingly be placed on the management of rural waste in New Zealand as our image of ‘clean green NZ’ contends with the realities of scarce recycling and collection services and limited drivers to change existing disposal behaviours.”
The lowest-cost collection methods for waste will proliferate due to price pressure. These will give the appearance of more sustainable activity, but create downstream issues with contamination which limits the value and useful outcomes for collected materials.
Organisations that fully commit to resource recovery and stewardship for their products at end-of-life will maintain a marketable point of difference and be rewarded by consumers who are looking for brand leadership in sustainability.
Alex Hannant, Chief Executive, Ākina Foundation
“Impact investment will build profile and momentum, climate change will come off the naughty step, and there will be increased focus on regional development.”
In line with global developments, 2016 could see the early stages of an impact investment market taking shape in New Zealand. This is likely to be characterised by a small but pioneering number of impact investment deals being completed; an increase in the number of organisations gaining awareness of, and actively seeking, expanded financing options; and some modest but pro-active steps from Government and private sector organisations (in the finance and investment sector) to support market development.
Technology will also play a key role. Expect impact investment to leap-frog some of the traditional investment mechanisms and play out through technology-enabled channels such as crowdfunding.
After eight years of being on the margins, climate change, or action on/investment in climate change, should return to mainstream private and public sector policy thinking. Enabled by a more optimistic, coherent, and long-term international policy framework, climate has re-emerged and will be a constant on the strategic landscape for just about everyone. Again, advances in technology will be key enablers - turning the long-vaunted green business opportunities into tangible options for innovation and competitive, disruptive markets. Expect new financing funds, products, and incentives to follow.
As discussions on inequality gaps continue globally, there seems to be an increasing focus on the relative fortunes of, and opportunities provided by, New Zealand's regions. The current contrast between Auckland’s 'rock-star’ economy and struggling regional economies in the North and East is stark.
In 2015, the Central and Local Government Forum set priorities that included both strong regional economics and resilient local communities. How this will be achieved is less clear. Optimistically, expect the emergence of more innovative approaches to, and smarter investment in, regional development that combines mainstream economic development with community and social enterprise. Also expect increased impact from the emerging Māori economy and a greater sense of self-determination from local communities themselves. Again technology will be a leveller and an enabler, although 2016 may be a little early for UFB to really pack a punch.
Karl Mischewski, Retail Development & Sustainability Manager, Gull New Zealand
“In the sustainable transport space there will be increased interest in biofuel blends and in particular biodiesel for commercial customers.”
Vehicle manufacturers are announcing new electric vehicle (EV) models and hybrids, with ongoing roll out of EV charging stations across New Zealand, including rapid charging units. However New Zealand consumer demand will outstrip New Zealand’s allocation and supply of EV’s from vehicle manufacturers. More airlines will use biofuels or renewable fuels for flights.
Roseline Klein, Sustainability Manager, Watercare
“I believe 2016 is the year that will put an end to climate change scepticism.”
2015 is likely to have been warmer than 2014, which was the hottest year on record, and 2016 is forecast to be warmer still. 2015 was also the year when political leaders worldwide got together and sent a long awaited and strong signal, reaching a universal agreement in Paris on the need to keep global temperature rise well below 2 degrees Celsius above pre-industrial levels. In 2015, Exxon was also exposed for having hidden what they knew about climate change years ago, hence engaging the world in decades of misinformed debate about how true climate change is. Who can still deny climate change in 2016? It would look so backwards! We have got our worldwide agreement and climate change related discussions at BBQs this summer have suddenly become much easier… time to focus on action now!
2016 is going to be a dry hot summer in New Zealand…. so while everyone should enjoy long summer weekends at the beach, it is also time to think about your water usage and start using water wisely now, at work and at home. Water is a precious finite resource and it is likely to be scarce this summer. You can find plenty of tips as well as customised help with Watercare’s Be waterwise programme.
Brianne West, Founder, Ethique
“In 2015 the trend of the conscious consumer grew significantly; moving into 2016 this can only continue. But consumers are certainly a lot wiser and companies that simply greenwash will not be tolerated.”
Business has a massive role to play in creating a more sustainable future and with the growth of B Corps around the world hopefully more companies will seize this chance.
Packaging revolution is another trend I hope to see going forward. There are now a lot of alternatives to typical petrochemical plastics out there but in a lot of places in New Zealand (and around the world) these are unrecyclable and actually causing more harm than good as people use more of it. Industry wide specifications (for example all water bottles made from one type of plastic) may help here.
Climate change is obviously what occupies the majority of environmental headlines around the world but hopefully the tone will change. There is a lot of negativity and many naysayers out there but now after the relative success of COP21 hopefully it will become an area of optimism and forward thinking. There is a lot of apathy and pessimism currently and people assume there is nothing they can do, this needs to change.
Matt Dagger, General Manager, Kaibosh Food Rescue
“I believe 2016 will be the year that food waste minimisation is pushed to the forefront of both environmental and social agendas.”
I think we will see a real awareness of the need for change at government, business and personal levels.
Unnecessary food waste has been identified as a significant contributor to global emissions and is an area in which tangible positive results can easily be achieved, should the will and inclination to do so exist. We are also living in a time of increasing levels of hardship for many and for good quality food to be wasted when people are going without is simply unacceptable.
Food rescue organisations such as Kaibosh are only one part of the solution. Over-production, over-ordering and the expectation of food (particularly fresh produce) to meet unrealistic cosmetic standards also need to be addressed if we are to see meaningful change regarding food waste. Increasing inequality and low wages in relation to the cost of living will continue to have an impact on whether people can afford to buy quality, nutritious food.
I believe that in 2016 we will see consumer-led demand take action to work against the twin issues of food waste and food insecurity. There are some exciting education projects which will also be unrolled nationally in 2016 that are going to change the way that people shop, eat and minimise their own food waste.
2016 is shaping up to be a pivotal year in the fight against food waste which will hopefully see long lasting and significant change for all of us.
Mike and Sharon Barton, owners, Taupo Beef
“The debate around the balance of feeding a growing population while protecting the environment will intensify.”
Mike was born in 1952, and at that time our global population was 2.6 billion. By 2015, it had grown to 7.2 billion people, so it has more than tripled within Mike’s lifetime (not that he is responsible!).
It is ironic that at a time we need to produce more food than ever before, we now know from science that food production leaves an environmental footprint. This creates a huge challenge for humankind – the balance of feeding a growing population while protecting the environment.
There is an increasing awareness that all food production leaves an environmental footprint, and is the biggest component of our personal impact on the planet. The debate around this issue will intensify – the current discourse tends to place responsibility for these environmental impacts on food producers, while asking consumers to pay none of these costs.
Worldwide, those food producers are facing declining returns and increasingly difficult climatic conditions. They cannot absorb all the environmental costs of food production – therefore, the price of food will increasingly need to account for the costs to the planet, of its production.
Most countries / jurisdictions avoid this challenge, through the use of subsidies and payments to food producers for ‘environmental good’, which has the added political benefit of artificially keeping the price of food low. New Zealand has an unsubsidised food production system, so will most likely be the first country in the world to internalise the environmental costs of food into the price paid.
We remain positive over the outcome of this debate - Taupo Beef has begun internalising some of the costs of maintaining the water quality of Lake Taupo into the price paid by our customers. The success of our story is based in part on an independent verification of our ‘water quality’ claims, but is due largely to consumer’s willingness to engage in this issue.
Our experience has shown us that with honest communication, strong relationships and auditable claims, consumers increasingly recognise their role in the food production process and how they will ultimately design the food systems of the future.
Sea Rotmann, CEO, Sustainable Energy Advice
“My main predictions are around sustainable energy and some big advances in the smart grid/storage and PV (photovoltaic) space - all of which have great potential to lead to some significant behavioural changes.”
I very much hope to see a greater push towards electric vehicle uptake including New Zealand research on superconductors that could reduce the issue around charging. I believe we will see a greater push to outlaw plastic bags, especially coming from councils and community groups.
In general, I believe that in 2015 we finally turned a corner and started taking climate change more seriously as a country and a global community. The current El Niño and serious changes in weather patterns we are already experiencing will ensure that climate change stays on top of the agenda in 2016 as well. The Government response is far from satisfactory but I believe both the public and private interests will ensure there is pressure on the politicians to not let this issue disappear off the radar again.