Sustainability a matter of “survival”- for society and capitalism

A high profile business leader has warned that New Zealand must catch up with the movement towards sustainable, “conscious capitalism” to survive in a disrupted world.

Michael Stiassny, chairman of Vector and several other companies, president of the 8000-plus member Institute of Directors, and a senior partner of KordaMentha, was speaking at a panel discussion about how to make Auckland sustainable.

The middle class being priced out of the Auckland property market was undermining the sustainability of the city itself, he said.

“The middle class is being disenfranchised and disappearing,” he said. “We need nurses to be able to live and work here. We need teachers, police, we even need office workers at Vector.

“This is one of the fundamental issues: making Auckland a place where the middle class can afford to live and want to live because without them we are not going to be sustainable.”

The panel event was the final of three in the Ballot Box series, organised by the University of Auckland Business School in the lead-up to the local body elections.

Stiassny was just back from a conference of directors in the United States. His strong impression was that directors there were “ahead of the game” - and ahead of their New Zealand counterparts.

“These people have embraced conscious capitalism in a wider sense – they are far clearer about their obligation to sustainability than the average New Zealand director.”

He said in the United States and many other countries, people are losing faith in political and business leaders, and governments are losing their legitimacy. This is creating a dangerous power vacuum that threatens capitalism itself.

“There is a vacuum and when there is a vacuum something fills it – populism.”

Businesses in the United States seemed to appreciate they need to fill that void with conscious capitalism – described by its champions as a style of capitalism in which trust, compassion, collaboration and value creation are as essential as competition and freedom to trade.

“The real question will be can the businessmen and the directors of New Zealand appreciate that obligation and step up and do it, because they will need change to do it.”

Business commentator and fellow speaker, Rod Oram, issued a challenge to Stiassny.

“If you’re inspired by what you saw in the United States, as president of the Institute of Directors you’re in a very excellent place to try and wake up the rest of New Zealand.”

“I appreciate my obligation,” replied Stiassny, to applause and laughter. “And I will try.”

Oram said Auckland’s ambitions to move toward a low carbon economy, as laid out in the Auckland Council’s Low Carbon Auckland action plan, were being stymied by unhelpful central government policy settings and lack of engagement by local government.

“With its extraordinary natural setting, we have an opportunity to make Auckland truly one of the greatest cities in the world. A lot of the drivers that would help us do this have not come through in the Unitary Plan, so there’s terrific work for the new mayor and councillors to do. We’re hanging on by our fingertips in terms of the very fine line between trashing and enhancing the place.”

Auckland emits more greenhouse gases per person than London or New York. The Low Carbon Auckland plan’s reduction target of 40 per cent of 1990 levels by 2040 would bring the city close to Copenhagen’s current levels, Oram pointed out.

Viv Heslop, senior sustainability adviser at Panuku Development Auckland, talked about the success of the Wynyard Quarter redevelopment, which has been named a finalist in an international competition recognising sustainable communities.

Panuku, a merger of the old Auckland Council Property Ltd and Waterfront Auckland, has a clear view on sustainable development, she said.

It involved thinking of development sites as systems, tapping into existing networks, working collaboratively - “co-everything”, recognising global problems need local solutions (“glocalisation”), and an entrepreneur’s mind set of “continuous improvement”.

Professor Basil Sharp, director of the Energy Centre at the Business School, noted potential impacts of intensification, such as loss of biodiversity, need to be planned for.

He referred to the idea of “smart cities” – cities that use technology to work better and more sustainably.

He said the government's goal of 90 percent renewable electricity generation by 2025 was achievable. The Energy Centre’s research also showed households could reduce their energy consumption by 18 per cent by using smart technology, and that the council’s target of powering 170,000 homes by solar would require collaboration with the energy sector, particularly the lines companies, to work for everyone.

And smart cities need smart governance, he said. “This means the use of digital technology to enable the community to participate, and to capture data to guide policy.”

It could also help reverse trends of low voter turnout to local elections, especially among younger people, “who are going to inherit the decisions we make today”.

“In order to achieve the outcomes of a sustainable city, the council will need to know its communities and their concerns better.”

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