Sustainable Business Survey 2016

Sustainable Business Survey 2016: NZ firms poised for progress

New Zealand businesses are taking mostly tentative steps into the world of sustainability, but may be gearing up to tackle the big issues, according to a University of Auckland survey.

The survey, conducted by the University’s Business School, found over half (53 percent) of the 33 respondents – chosen because they’d already made moves towards improved sustainability – aimed to become sustainability leaders in their sectors in the next three to five years. One-fifth aimed to disrupt their markets.

Businesses surveyed said they were targeting projects that deliver clear payback, such as improved energy efficiency and reduced waste. But they expected to embrace more ambitious goals, such as reducing environmental impacts and carbon emissions, in the next three years.

“The emphasis can be expected to shift to product and services demand and development, employee engagement and diversity, reporting (probably non-financial) and environmental and carbon footprint product,” says Professor Greg Whittred, Dean of the Business School.

“Businesses are realising they can innovate, differentiate and build relationships with their customers through being sustainable. Sustainability is becoming a competitive frontier. It also helps them compete for quality staff.”

The primary driver for sustainability for these businesses was the future market opportunities it offers, and efforts to seize those opportunities were being led from the top – the executive suite and boardroom. Customer and client demand was significant, too, in some areas. Investor pressure ranked lowest of the drivers listed, though.

“It is striking that pressure from investors ranks so low,” says Professor Whittred. “The reaction to KiwiSaver portfolios including cluster bombs and tobacco investments shows how quickly that can change once we start to catch up with other countries on our understanding of socially responsible investment.”

Fieldwork for the survey was conducted before the cluster bomb issue made headlines in August.

Lack of incentives and regulatory barriers were the biggest obstacles identified by respondents.

“This could refer to how stacking up a business case for sustainable initiatives is a challenge, or to the fact that costs to the environment – externalities – are still often falling on the public and taxpayer,” says Professor Whittred.

The next-biggest obstacle was insufficient customer demand. “This reflects the fact that we’re a small market and the sustainable consumer is still a small portion of that. Also, many can’t afford to pay a premium for sustainably produced goods and services.”

Cost, and resistance from middle managers and staff were also flagged as challenges to overcome.

The Business School conducted the survey as part of its Sustainability Programme, launched last year, which aims to innovate teaching around sustainability in business and act as a convenor, bringing together different stakeholders.

Survey respondents were asked how universities can best contribute to their sustainability work. Top of the wish list was ensuring all graduates have at least a basic understanding of the concept of sustainability.

Leaders in sustainable business were also looking to universities to raise awareness of the business case for sustainability and to offer student internships and case study opportunities to deepen student knowledge and engagement. Research partnerships, and producing specialist graduates were also desired.

“The feedback on what universities can do is helpful input and affirmation for the direction of our Sustainability Programme,” says Professor Whittred.

Read the full survey here.

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