Sustainability thought leadership series

DR JOHN LLEWELLYN: 

If you were running planet Earth like a company, then it would make economic sense to authorise payments of up to $50 to reduce a tonne of CO2 emissions.

DR MARK WADE: 

Climate change is here and it's not going to go away.

DR JOHN LLEWELLYN: 

New Zealanders had better be pretty sharp in recognising how fast the world is changing in their major markets.

DR MARK WADE: 

The market reality and the legislative framework is taking this as a given, and, therefore, in practical terms, in terms of your marketing, your brand, the issues that you need to deal with, it is a reality.

There's going to be 50 per cent more of us in just a little over 40 years time. This is going to put tremendous pressure upon world resources, whether it's food, it's housing and - but, in particular, energy. So how do we reconcile these competing demands? We simply can't go on the way that we are. We have to have a new solution, a more sustainable world.

DR JOHN LLEWELLYN: 

There's going to be a fundamental change globally in the structure of production. It's going to change what is produced, where it's produced, how it's produced and who produces it.

DR MARK WADE: 

We're here to talk about the importance of sustainability to New Zealand companies and not just the long term but, actually, what this can do for you right here and now.

Sustainability issues are only going to increase. If New Zealand companies choose to ignore these signs, then they run the risk of a gradual erosion of their competitiveness.

If, on the other hand, they take them seriously, then they're going to be likely to be architects of their future as they're able to master the opportunities that a more sustainable world provides for them.

DR JOHN LLEWELLYN: 

When any radical change is occurring, it's better to be ahead of that change than behind it. All studies of change show you that if you start behind, even if you race extremely fast, it's difficult to catch up. Far better to see it coming, get out ahead and stay there.

I'm not a green. I'm an economist. Not all greenhouse gas reduction costs money. Surveys and calculations by McKinseys find that a substantial proportion, perhaps between a quarter and a third of the necessary greenhouse reductions that are advised by the scientists can be achieved with known technology and at negative cost. In other words, if you actually did it today, you would save more than it costs to do it. It's a bit of a mystery to me why firms don't do that.

DR MARK WADE: 

Companies hoping to operate in Europe need to take into account the market realities, and there is a growing awareness of green and ethical issues. And these are being reflected in consumer purchasing choices and increasingly within legislation.

DR JOHN LLEWELLYN:

The Europeans have now become very environmental conscious, very sustainability conscious. Americans, some are, some aren't, but with the election of President Obama and his policies, that's going to change.

DR MARK WADE: 

In addition, one is seeing the power of the retailer. They're the ones who make the decisions as - what they're going to put on their shelves. And if they don't believe that the brand qualities of those goods are going to reflect their customers' demands for cleaner, ethically-produced goods and services, then they're simply not going to buy them.

DR JOHN LLEWELLYN: 

I would not want, as a CEO, to appear before my board and say, I know that 11 national academies of science, including the US, have agreed that mankind is walling the earth. However, I'm proposing to base my corporate strategy on the assumption that those 11 national academies of science have got it wrong, and that climate change policy will, therefore, be abandoned.

Well, the case I'd rather present to my board is saying, I'm not sure that the scientists are right. How can you be sure about anything?

But on the balance of probabilities they've probably got it right. I realise climate change itself won't affect our economies for several decades yet, but I judge that publics around the world are increasingly going to support policy to reduce greenhouse gas emissions, and those policies bring the effects on me, the company, of future climate change right forward to the present. Indeed, they're already doing so.

You can already see that the larger companies, which, of course, find it easier to afford these things at the beginning, are appointing sustainability officers who are looking at the range of their operations and go beyond that and look at the range of operations of the suppliers of these firms.

So a lot of f... smaller firms are going to find themselves being visited on the first occasion by the 

sustainability officer of the company that they supply, and they're going to have to scramble pretty quickly to find out what this means.

You can see very clearly that large companies care a very great deal about the carbon imprint, the sustainability consequences of the goods they're buying, and they put the pressure on their suppliers.

DR MARK WADE: 

It's up to you whether you're going to be able to respond to these issues or - and become an architect of your future, or whether you're going to become a victim of circumstance.

END