6 key learnings from Air NZ Sustainability Framework launch

22 September 2015

Last week Air New Zealand unveiled its industry leading sustainability framework to business leaders. Here are our six key learnings from the unveiling.

1. Sustainability means the environment, society and economics

Sustainability is often misunderstood as meaning exclusively looking after the environment but it’s the integration of environmental, social and economic value. This misunderstanding leads to key communication challenges that sustainable businesses need to overcome:

  • Business growth isn’t negative so long as it’s linked to positive outcomes for society
  • A misconception that sustainability has a financial cost for business.

2. Air NZ is planning to demonstrate the value between growth and improved outcomes

Here are some of the ways the company will do that: 

  • Financial value: reducing waste lowers costs (for business and society) and savings can be reinvested into the business.
  • Business continuity through long term strategy.
  • Product development and innovation through sustainability.
  • Enhanced brand value.
  • Stronger relationships with business partners, suppliers and employees.

3. It never seems like the right time, which means now is the right time

The reality is most companies literally don’t want to deal with sustainability. They have too much firefighting to do and so hope the S-word is out of sight and out of mind. The timing is never right but as businessman Ray Anderson proved, while the timing may not feel right it’ll be the best thing you can do for your business.

For Ray the shift to sustainability drove innovation, created new knowledge and led to a rethinking of business success, a recalibration of the business and new investors for new models of wealth.

4. Business leadership is critical

Business has scale and a lack of bureaucracy that government doesn’t have which means it can act fast to solve some of the pressing world issues.

  • Business is crucial in the up and coming climate change talks in Paris. A lack of political leadership means that corporations need to take the lead.
  • There are at least six ambitious commitments being made by global business coalitions.
  • No world leader (political) will be able to stand up and say ‘we will lead’ because the business community will not let them. They are defending their vested interests.
  • We need a price on carbon. 
  • Collaboration with others will be important – many of the challenges are so big they can’t be tackled alone.

5. Business as value creators not value destroyers

Most companies are systematically destroying the global economy. This means that a small number of people are still prospering at the expense of others. They are value destroyers. Sustainable businesses are those focused on value creation, generating prosperity and wealth beyond economics and into wellbeing of the planet and society. The question for business is how to use its talents to create wealth for today and tomorrow.

Through this lens we find an amazing place for empowerment (staff, suppliers, shareholders, investors) for business leaders to generate wealth in this new way.

If you are not thinking this way beware of shocks! While these can force business to make positive steps they can be catastrophic. When students said they didn’t buy Nike apparel the company was forced to respond. It was one of the best things that could have happened and now Nike is one of the best managed companies in the world.

Breakthrough stories are often slow grinds. Companies might start with low targets and as ambition grows and they move through carbon neutral to carbon positive (driving innovation). 

This is a defining moment in the history of human kind.

6. Air New Zealand is leading the way, here’s what we can learn

Have good governance mechanisms in place; AIR NZ has six world renowned advisers and joined Forum for the Future. The Board reviews the work and signs off the Sustainability Report.

Key areas Air NZ is focussing on embedding into the business:

Social – people and communities. Engaging its 11,000 staff Air NZ is focussing on upskilling and creating a world class organisation with diversity of employees and strong safety and wellbeing commitments.

Community – connectivity driving economic and social value. The airline is becoming part of other communities through emergency responses locally and in the Pacific and has new initiatives to support communities.  

Environmental – carbon and investing in nature and science. This includes improving the efficiency of planes through better fuels (playing a key role in getting biofuels up to scale for airlines), design, flight paths and light-weighting on a daily basis.

Approaching the environment with an investment mind set is also critical and includes native forest regeneration projects which offset carbon created and encourage biodiversity. Air NZ’s approach to nature takes the form of collaborations with Department of Conservation, biodiversity projects, protecting endangered species and ongoing partnering with Antarctic NZ for research in climate change.

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