Sustainability leadership - we don't know what we've got 'til it's gone

The growth of socially and environmentally conscious consumers is fueled by a generational change. Photo / iStock

Ireland and other countries are moving fast to claim the clean green mantle that has long been associated with New Zealand. We have become complacent, and our most valuable national asset is at risk.

Ireland has a national project to drive towards sustainability of their farming system and to market it aggressively. By the end of this year, virtually all their beef and dairy farms will be audited to meet the agreed standards.

As Kiwis, we still recognise this story about our country - clean flowing rivers, pristine beaches, fresh air and a fair go for all. But we are polluting our environment and widening inequities in our society. We are also failing to tell our story through our exports. We don't talk about our grass-fed dairy, our hormone-free beef and our GM-free crops.

The market for products with credible sustainability credentials is large and growing. Research into a group of consumers dubbed LOHAS - Lifestyles of Health and Sustainability - shows this segment comprises around 20 per cent in OECD countries and a rapidly growing segment in emerging Asian economies.

LOHAS are typically willing to pay more for eco- and socially-friendly products, so long as the claims are supported by credible certification or other forms of verification.

The growth of socially and environmentally conscious consumers is fueled by a generational change. Within a decade, millennials will amount to 75 per cent of the global workforce, and they will work for, buy from and invest in enterprises they love.

Barry Coates.

Some multinationals are responding to the sustainability agenda. Mark Wilson, a Kiwi who is CEO of insurance giant Aviva, recently visited Auckland and talked about his decision to stop reporting quarterly results to investors on the grounds that this was driving a short term perspective, rather than a longer term commitment to investment and sustainability.

There is a new generation of business leaders, aware that their role is to contribute to society, not just to maximize profits. Mounting research shows that doing good is also good business.

As the Silicon Valley entrepreneur Peter Thiel said:

"The most successful companies were never established to make money, they were established to change the world."

Commitments to climate action by large businesses in the run up to the Paris Agreement sent an important signal to governments that they needed to step up and provide a predictable policy framework.

The good news is that there are signs of a change in New Zealand. When Air New Zealand announced its sustainability policy to 450 business leaders in Shed 10 on Auckland's waterfront in September last year, it felt like a turning point.

Companies such as Z Energy and Vector are positioning themselves for the future in a time of technology and market disruption. The wine sector as a whole is collaborating to drive towards sustainability.

Some of the most exciting change is coming from nimble and innovative SMEs. The annual Sustainable Business Network awards provides a snapshot of the dynamism and energy of rapidly growing businesses meeting customer needs and the demands of international supply chains.

Major international retailers like Walmart, Tescos and Carrefour now require their suppliers to meet social and environmental standards, with independent verification.

Our long standing farming tradition, together with our location beside the ocean, provides us with the ideal climate and conditions for sustainable farming and food production. Our grass-based production system provides a strong foundation as we continue on our sustainability journey.

We need to gear up if New Zealand is not to be left behind. In 2006, New Zealand was ranked top in the Yale Environmental Performance Index. This year we were ranked 11th.

KPMG surveys reveal NZ top 100 companies are amongst the bottom quartile for corporate responsibility reporting, while Grant Thornton surveys show that New Zealand has one of the lowest proportions of women in senior management roles amongst Asia-Pacific countries.

It is not too late for New Zealand to once again take the mantle of leadership on sustainability. But it needs commitment and collaboration across society - business, academics, civil society, consumers and government.

The Business School is drawing on its deep expertise and close industry ties to launch a new Sustainability Programme with a week of debate and action this week.

High profile speakers include:

• Malcolm Rands, co-founder of Ecostore.
• Phillip Mills, Les Mills International CEO and founder of Pure Advantage.
• Captain David Morgan, from Air New Zealand.
• Chris Morrison, co-founder of All-Good Organics and Karma Cola.

Barry Coates is leading Sustainability Week, a series of events at the University of Auckland Business School this week. All are welcome: www.business.auckland.ac.nz