NZ Herald business editor at large

Liam Dann: Where does business fit in the green debate?

Being seen as eco-friendly can be a marketing advantage but there are deeper issues in life and business.

Making better use of available technology - including solar generation - to cut down on power consumption doesn't need to be a hippie manifesto. Photo / Thinkstock
Making better use of available technology - including solar generation - to cut down on power consumption doesn't need to be a hippie manifesto. Photo / Thinkstock

This week the Business Herald has a focus on sustainable business. As these kind of theme weeks go it has ended up being pretty good timing.

Environmental issues have really come to the fore of the public consciousness this month.

The two big ones really animating New Zealanders right now relate to dairy farming, and the pollution of our streams and rivers, and deep-sea drilling for oil, or more likely, natural gas.

There is the bigger concern and more constant issue of global warming, of course, but ultimately it is the more immediate local environmental risks that get people painting placards.

But where does business fit in?

There's no doubt that being seen as green and eco-friendly can be a great marketing advantage.

But beyond that, where is the value for business and what do we mean by sustainable?

We all want to be sustainable. At least, we hope we'll be around for the foreseeable future, or that our business will.

In that sense sustainability, which has become a bit of a buzz word in the business world, can seem a bit redundant.

It's almost like adding the phrase "going forward" to a sentence - something no one other than Doctor Who has any good reason to do.

The issue with sustainability is that its meaning is highly flexible.

What's your timeframe for sustainability? The next financial year? Your retirement? The rest of your life? Your children's lives or grandchildren's?

The correct answer, from a green perspective, is generally some sort of indefinite sustainable future for the human race. It is an admirable position that aspires to go beyond selfish and short-term thinking.

But even then, what is it that we are seeking to sustain? Is it the kiwi, clean rivers and beaches, or is it the comfortable technological 21st century society we've become accustomed to?

The fossil fuels industry works very hard to be sustainable. It is drilling and prospecting all over the world to find new sources of fuel and sustain itself into the next century.

There are those who argue that this can't be allowed to happen. The science now clearly suggests this will be bad news for the planet.

But few people are prepared to give up on petrol cars or air travel just yet. The thousands protesting on West Coast beaches at the weekend didn't all cycle there.

Even if we can all agree that the environmental cause is a good one we all have limits on the extent of sacrifice we are prepared to make for it.

Within the business world the bottom line remains a non-negotiable, well, bottom line.

That sounds harsh but the reality is if you go broke you go out of business. If you go out of business another will fill the gap and perhaps that business will care less about the local environment - most likely because it won't be based here.

A stake in the local community is a key driver for a sustainable business outlook and we need a strong and profitable local business sector that can afford to make changes towards being more environmentally friendly.

Even the term environmentally friendly sounds a bit corny these days.

I'd argue that something all businesses should aim for - and most could do better at - is environmental efficiency.

Efficiency is about minimising waste, and therefore costs, while maximising output. Even within the current economic framework there is huge scope for New Zealand businesses to become more energy efficient.

Making better use of available technology - including solar generation - to cut down on power consumption doesn't need to be a hippie manifesto.

It is just common sense although it often requires some short-term capital investment that will pay back only over the long term.

If sustainable business means taking a longer-term view then I'm all for it.

But there is a case to be made for more central government assistance to get households and businesses started on a path to greater energy efficiency.

State organisations such as the Energy Efficiency and Conservation Authority are doing a great job.

But more funding and a concerted push towards a renewable solar-enhanced business world could return great gains to the nation.

When you look around the world it is some of the biggest and wealthiest nations that are doing the most to transform their environmental performance.

China, even as it burns coal and battles thick smog in its cities, is leading the way on solar energy and has grand ambitions for renewable power generation.

New Zealand's economy and its businesses need to stay strong and profitable so we can afford to make the environmental changes we're going to need to over the coming decades.

We need to be able to afford the best technology available. We have to find a balance and that means finding some consensus on highly politicised issues.

These shouldn't all be lumped together as they each have their own risk and reward profiles.

The current groundswell of public anger around deep sea drilling seems to be driven more by concern about oil spills polluting our beaches than broader disapproval of more fossil fuels adding to global warming.

The risk of oil spill is statistically slim. In fact the chance of finding oil is very small - gas finds are more likely.

But an oil spill would be catastrophic on a local level and is easy to visualise so it gets people protesting.

On the flip side the economic benefits to a small nation like ours could be enormous. The kind of oil find that Greenpeace describes when painting black pictures could be a game-changer for allowing future governments all sorts of options on the environment that we can't afford at the moment.

The other big environmental issue facing us has a different risk profile again.

Should we continue to make dairy production more intensive at the risk of further polluting our rivers?

Given the value of the gains above what we already earn from dairy, and factoring in the returns from existing land use and the broad economic benefit to tourism, is it worth the high risk doing further damage to the nation's waterways?

At this point the onus is surely on the dairy industry to prove its case rather than the other way around.

The debate on these issues is is a good one to have but it shouldn't divide us down party lines. It is good to start with what we agree on and what we want to sustain in this country. We all want to sustain our spectacular rivers and forests and we want to sustain a way of life that celebrates and enjoys the natural world we are lucky enough to live in.

- NZ Herald

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NZ Herald business editor at large

Liam Dann is business editor at large at the New Zealand Herald. He has been a journalist for 20 years, covering business for the last 14 of them. He has also worked in the banking sector in London and travelled extensively. His passion is for Markets and Economics, because they are the engine of the New Zealand economy. He hosts The Economy Hub video show every Thursday.

Read more by Liam Dann

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