Throughout my career I’ve learned about the impact of business as usual on our landscapes, seas and society. I’ve also seen brilliant work done by companies towards protecting and regenerating the systems we rely on for life. We must invest in them.
Direct experience of droughts, floods, fires, pests and diseases has become an everyday reality. It’s impacting investment returns.
The need of change is now urgent.
Businesses need to redesign their operations, their supply chains, products and services. But it’s also fundamental to work on the drivers: procurement – what companies buy – and investment, what gets funds.
We need a massive shift in investment. We need to move our money away from the most destructive activities towards activities that are re-generative by nature.
It’s a moral imperative, and a financial one.
The work of the Sustainable Business Network (SBN) focuses on climate, waste and nature regeneration. We’re also rewiring the cross cutting systems vital to making the changes needed. We’re helping businesses make more sustainable buying choices. We helping Kiwi investors benefit from the emerging opportunities. We help raise sustainability standards across supply chains and entire sectors. We provide training in sustainability and leadership to help shift business culture towards the way the world is going.
For many this can feel quite new. But it’s really just a process of reconnection. Reconnecting businesses to the impacts of their decisions. Reconnecting them to the opportunities in change. Reconnecting people to people so we treat others as we like to be treated. Re-connecting people to the natural, real world.
There’s been a rapid growth in ethical and sustainable investing. There’s been an explosion of certifications. There’s increasing divestment from things like weaponry, tobacco, alcohol and fossil fuels. Emissions trading is driving huge new investments in renewables and forestry.
According to the 2020 Global Sustainable Investment Review more than a third of funds under management globally are now in sustainable based investments. That’s something like US$US35 trillion. That’s gone up 15% percent in 24 months.
Consumer research in New Zealand found almost half of those surveyed said they’ve switched to a brand or service provider which is more sustainable. More than a third cited climate change as an issue of concern. Nearly a third said they actively seek out ‘do good’ brands and were prepared to invest their time for them.
Governments too are responding, regulating to advantage more sustainable investments. Black Rock is one of the world’s largest investment funds. It has divested from all companies that make more than 25% of their revenue from coal. It too has made the connection that climate risk is investment risk. In New Zealand, the major banks all have sustainability strategies. We can select ethical investments and Kiwisaver funds. We can be guided by organisations like Mindful Money and Pathfinder Asset Management. They seek out companies actively making a positive difference. And there are new forward looking funds like the Climate Venture Capital Fund, which is investing in the low carbon future we need.
The way the markets are shifting is clear. But it must happen faster. Climate change is galloping on. Eighty per cent of Aotearoa New Zealand’s reptiles, frogs, bats and birds are threatened or at risk of extinction. Two thirds of our native forests have been destroyed since the late 1800s and 90% of our wetlands. In recent summers around 100 of our rivers, lakes and bays have been too polluted to safely swim in.
We are heading towards a whole new world. We need our investment market to tackle this effectively. Billions of dollars are already flowing into tree planting, “carbon farming” but only trickling into regenerative agriculture or biodiverse forests across New Zealand. The current flows will be transformative but not in a good way. The five largest landowners in New Zealand are now forestry interests. Hundreds of thousands of hectares of forestry are being planned. Most of it pine. It’s now up to us to maximise the value of those investments for the Aotearoa and its people. This does request a swing in our investment now to move towards regenerative solutions that rebuild our native, bio-rich landscapes, with local iwi and wider community involvement.
SBN is researching the enormous business opportunities these changes present with a big focus on a programme of learning open to all businesses. We’re supporting regenerative careers and training – the kind of skillsets we need which know how to do business without eroding our nature systems. That will help keep this value in our local businesses, and local communities. There’s an abundance of investment opportunities in shifting sectors and emerging innovations.
Ultimately we need a new social contract, even a new economic system which is already emerging and accounting for a low carbon, regenerative circular economy, where resources are never abandoned to become waste or pollution.
That’s not a side note on the balance sheet. It’s not an extra for when the good times are rolling. It must be central to our financial engines and core to all our work. We can’t do it separately, we have to work together.