Q&A with Mike Bennetts, CEO of Z Energy

19 August 2014

“We have delivered more by saying that we stand for something, even though we didn’t know how to do it”.

Find out about Z Energy’s vision for sustainability and what the business has learnt from committing to a more sustainable future in our interview with CEO Mike Bennetts. Mike will be speaking at the Project NZ Conference on 17-18 September.

What is your vision for a more sustainable New Zealand?

I think it would be great if every New Zealander did what they could to contribute towards a more sustainable New Zealand. Too often we rely upon big game-changing things to happen and that’s usually where we get stuck. If every one of us took individual responsibility and did what we could, that would make a difference.  

My bigger vision is to get some positive economic outcomes from this. When I talk about sustainability I refer to social, economic and environmental sustainability. It would be great if New Zealand could end up as being environmentally more sustainable, which would lead to greater social outcomes and improved economic performance.

What is Z Energy doing that will contribute to a more sustainable New Zealand?

In 2011 we said we needed to make a difference and move from being in the middle of the problem to the heart of the solution. We’re part of an industry that emits 20% of New Zealand’s greenhouse gas emissions, so clearly we have a role to play.

We said we would stand for four things, and by 2015 we would deliver on 16 goals that supported them. We therefore stood for something, even though we didn’t know how to do half of it at the time!

The four things Z stands for are:

  • We want to use less and waste less in our own operations. We can’t tell other people to improve their lot in their world if we don’t take care of our own back garden.
  • We want to do business in a way that supports New Zealand, which means being well connected to neighbourhoods and making sure we push business  towards local communities where we can.
  • We want to reduce New Zealand’s reliance upon our products.
  • We want to reduce our customers’ carbon intensity.

What have been the advantages of making that commitment?

It’s been really important to have made a public statement on this. That’s partly to create a bit of an edge within the firm – now we’ve said it publicly, we can’t walk away from it. More importantly, now we’ve made a public commitment, it’s encouraged people to make contact with us. By standing for something big and something counter-intuitive, we’ve actually attracted a whole lot of interest, which has enabled people to come to us with their own ideas.

We’ve learnt more by being public about our sustainability commitments than if we had kept it a secret.

How are you measuring progress?

Once a year we report publicly on our progress through our annual report, in which we state the goals and how we are tracking against them.

Internally, once a quarter, the executive team reviews progress on each of those goals. We have a sustainability manager who identifies the areas where we’re stuck, and we have a talk about what we’re going to do about them.

In the firm we run different initiatives and programmes, so on a daily or weekly basis we may get feedback on something. For example, we run a waste management programme on which we give people weekly feedback. We create competition between teams to see who can get the biggest improvement.

Have you got any tools to help customers reduce fuel consumption?

We’ve been developing a piece of technology to enable customers to reduce their use of our products. We’ve had it in the pilot stages with about a dozen customers on and off over the past 18 months. We’ve recently committed to taking it from a pilot to a fully blown customer offer and we’ll work on that over the next 18 months.

We’ve been carrying out a number of initiatives to educate people. We have a very large Facebook following, so we put tips on there on how to reduce consumption of our products. We also partner with other organisations, such as the AA, to help educate people that if they pump their tyres up properly they reduce risk of road accidents and also reduce fuel consumption.

We have a tricky space here, because New Zealanders don’t like being told how to live their lives. But they love competition, so we try to turn some of this into a game that gets people competing either with themselves or with their family and friends to lead to good outcomes.

What are some of the challenges of driving sustainability through a business?

One of the first things to attend to is to bust the myth that good environmental outcomes come at the cost of economic outcomes. In my experience the early steps you take around environmental sustainability are usually economically positive. This notion that it costs money to be green is a myth.

It’s also important that inside the company this has to be a value that the company believes in. If it’s just an initiative led by the boss it can by quite limiting because it does require people to change their behaviours, change their orientation and deal with paradoxes. So unless they’re up for it, it can be pretty hard going.

We’re really fortunate that for the people inside Z, sustainability is a strong value for us that we care about. So even though we sell products that pollute the world, we do care about doing it in a safe and less carbon intensive way.

A lot of strategies fail because they are not aligned with the values of the people who being asked to execute them.

What is your vision for a more fossil free future?

If we sold 20% less of our products but we put the selling price up by 5%, we would be financially better off. That is counter-intuitive for most people, and certainly many industries couldn’t say that, but we’re a high fixed cost, low margin business.

Our success need not come from selling more; it comes from getting our margins up. So if we could find a way to reduce New Zealand’s consumption of our products but get people to pay more, New Zealanders would be 15% better off and the company would be better off financially.

Often you need to frame the paradigm that you want to work with as opposed to being constrained by whatever paradigm you think you’re working within.

Do you have a nugget of wisdom for our readers?

One thing I’ve learnt is that it’s good to stand for something big, even if you don’t know how to do it, and then the talents and skills of your people are brought to bear on that. When you make that statement public, often other people get interested in it as well. Often, in particular when you’re a big company or publicly listed company, people naturally shy away from making public statements unless they are 100% sure they can deliver on it.

We have delivered more by saying we stand for something, even though we didn’t know how to do it.

Mike Bennetts, CEO of Z Energy, will be speaking at Project NZ, SBN’s national conference, on 17-18 September at AUT University, Auckland.