Sustainability: the key to prosperity, wealth and survival

Sustainability has public support, but some executives don’t think the government’s policies go far enough.
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Sustainability has public support, but some executives don’t think the government’s policies go far enough.

There's a war of words going on over sustainability. Even ardent fans of the practice don't like the term.

Business may already be shifting to a related concept, according to one panellist at our recent Fairfax Media/Chartered Accountants Australia New Zealand roundtable.

"The phrase that comes up is not 'sustainability', it's actually 'social licence to operate'," says Kirk Hope, chief executive of Business NZ. "It's a bit broader, a bit more all‐encompassing. "

Sustainability is about what you can do now, you can do tomorrow, says Ecostore chief executive Malcolm Rands.
JESSIE CASSON

Sustainability is about what you can do now, you can do tomorrow, says Ecostore chief executive Malcolm Rands.

Hope says it implies that if businesses aren't making decisions for both their customers and for the communities and environments in which they exist, they probably aren't acting acceptably.

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If a business is creating "externalities" – costs that fall on the community as in the case of pollution – it could breach its social licence, he says.

Like Hope, Ecostore chief executive Malcolm Rands isn't a fan of the "S" word, saying it's "not sexy", but he hasn't managed to find a better alternative.

"If you look at sustainability's definition it's easy," Rands says. "What you can do now you can do tomorrow. And your children can do and your grandchildren can do. Why business should be so into it is because one of the three bottom lines of sustainability is you've got to make money.

"Right inherently in it is prosperity and wealth."

Blair Woodbury, NZ Post's general manager of markets and business development, says being sustainable comes down to choices and consequences.

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"The critical thing for business is to be clearer about what are the choices and consequences and get feedback mechanisms to ask where is the line drawn for every organisation. That is the line we'll never go below and every decision and every choice we make will be above that."

The cost of crossing such lines is increasingly falling back on business, Hope says.

"Communities are much, much less willing to sustain those externalities and are pricing them up."

Rands says he was shocked by a recent statement by the Minister of the Environment that it wasn't a Kiwi's right to swim in a river. That does not appear to fit within Hope's theory.

That's why regulation was necessary, says Phillip Mills, chief executive of Les Mills International.

"You can't do it without regulation ... There will always be bad actors who will take advantage of the situation," he says.

The priority has to be countering climate change, Mills says.

"If we don't deal with climate change, at two degrees increase, you think we have a problem now with a million refugees in Europe, try a couple of hundred million climate refugees loose in Europe right now. It's an unimaginable problem."

Allowing "phony" carbon credits into New Zealand's scheme has made it particularly weak, Mills says. It doesn't encourage businesses to adapt.

New Zealand could also be a leader in soil sequestration – the storage of carbon in pasture, he says.

That would come with benefits including soil and flood protection, while the adoption of organics would boost primary production prices.

"There are very significant opportunities here for New Zealand, we just have to look to the future."

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