Deloitte Top 200: Sustainable Business Leadership - Kathmandu - NZ Herald

When Kathmandu achieved B-Corp certification in 2019, it became the largest Australasian retailer to be certified through the stringent process which recognises the highest standards of environmental and social performance.

“Part of being a certified B-Corp is looking at how we can benefit everyone that our brand comes in contact with, from suppliers to customers,” says Kathmandu CEO Reuben Casey.

“It helps us on that path of continuous improvement and demonstrates to our customers, shareholders, investors and suppliers that we are committed to doing the right thing.”

The Deloitte Top 200 judges commended Kathmandu Holdings for putting sustainability right at the heart of its strategy, and say this is why Kathmandu has been recognised as the winner of the 2021 Sustainable Business Leadership award. They are impressed by the leadership it demonstrates across ESG (environmental, social, governance) to drive long-term value for its shareholders and for the planet.

The Kathmandu brand was established in 1987, with Kathmandu Holdings formed in 2009 as a publicly listed company. The subsequent acquisition of hiking footwear brand Oboz (2018) and surfwear brand Rip Curl (2019) has seen Kathmandu Holdings transform from an Australasian retailer to a brand-led global multi-channel business. The Group is now working to extend Kathmandu’s B-Corp accreditation across its other key brands — Rip Curl and Oboz.

“Sustainability is central to Kathmandu’s strategy and is felt by all divisions of the company,” says Top 200 judge and Direct Capital managing director Ross George. “We were impressed with this ‘whole of company’ involvement — it is transnational and embraced by the board, management, and all levels of staff.”

Last year, Kathmandu Holdings completed an ESG materiality assessment across the group, speaking with stakeholders about where it can do better and what it should be focused on.
It also recently secured NZ’s largest syndicated sustainability-linked loan. The A$100m loan is tied to ESG and will be measured against a reduction in greenhouse gas emissions, B Corp certification, and improving the transparency, wellbeing and labour conditions for workers in its supply chain. If targets are hit, the interest rate on the loan decreases.

The judges were impressed by the bold ESG targets Kathmandu has set out to achieve by 2025, as it continues to consider how it can improve at every touch point. One of these targets was to become carbon zero by 2025. Kathmandu reached this target four years ahead of schedule, after offsetting its operational carbon footprint through Toitū carbonzero certification.

Casey says while this is a huge step, Kathmandu will continue to work towards its larger goal of net zero environmental harm by 2025. In 2022, it will set science-based targets that align with the Paris Agreement, and will hold itself accountable to those targets.

“This forces us to really understand the wider impact across the wider supply chain and value chain, as opposed to just doing what we can control,” he says. “It also helps us to influence our suppliers a bit more as well.”

Another of Kathmandu’s targets is to have 100 per cent of its products designed, developed and manufactured using elements of circularity principles.

In a first step, last year Kathmandu released its Pelorus Biofleece, made from 100 per cent recycled fabric which can degrade by 93.8 per cent in landfills at the end of its life. Later this year, it will release a 100 per cent biodegradable down jacket, with every component of the jacket able to biodegrade in landfill and marine environments.

“We are trying to demonstrate leadership and push forward the boundaries of what is possible,” says Casey. Kathmandu Holdings’ other brands are making progress towards its aim to achieve B-Corp certification across the entire group.

Rip Curl undertook a carbon audit and established a new ESG team to reflect Rip Curl’s increased focus on sustainability and take steps toward B Corp certification. The business sources its sustainable cotton in line with the Better Cotton Initiative, and this year launched a wetsuit take-back programme.

Oboz has embarked on its first materiality assessment and carbon footprint audit. Over the next 12 months it aims to work aggressively to surpass the 80-point minimum requirement to become B Corp certified.  The company plants a tree for every pair of footwear sold and has 95 per cent environmentally preferred leather materials in its product range.

Finalist: Lion

Country Director for Lion New Zealand Craig Baldie says the company’s success hinges on its ability to operate ethically and in the best interest of society, including looking after the environment.

The beverage brewer and manufacturer’s sustainability approach aims to strengthen the resilience of the communities in which it operates, champion responsible use of its products, and ensure its environmental legacy has a positive impact now and for future generations.

The Top 200 judges commended Lion for recognising the importance of operating ethically given the product they sell, and its focus on creating a balanced portfolio of products — including low and no alcohol options.

“Lion has been a New Zealand leader in creating a culture of responsible drinking which it calls mindful consumption,” says Top 200 judge Ross George. “It runs alcohol education programmes and is a member of the responsible drinking charity, Cheers.”

“On the employment front, Lion is an inclusive, flexible and diversified workplace.”
Baldie says Lion’s ability to operate is a privilege, not a right.

“Businesses who do the right thing for the long term are the ones that will endure,” he says. “For Lion as New Zealand’s largest alcohol beverage company, this means contributing to a positive and safe drinking culture is of primary importance.”

The judges were also impressed by Lion’s very direct commitment to the circular economy concept and its responsible practices in the supply chain, which are reflected in its commitment to a net zero value chain by 2050. This involves partnering with suppliers to measure and reduce collective lifecycle emissions.

As part of this strategy, Lion has committed to use 100 per cent renewable electricity to brew its beers by 2025 and has further stretched itself by adapting its existing science-based target to limit global warming to under 1.5 degrees. This sets a reduction target of 55 per cent by 2030 for its direct emissions from a 2019 baseline. The circular economy concept is embedded in Lion’s business performance and targets, as well as parent company Kirin Holdings’ Environmental Vision 2050.

The judges note that Lion has already made good progress.

Since 2015, it has achieved a 28 per cent absolute reduction in its carbon footprint. It has become the first large-scale carbon neutral brewer in both Australia and New Zealand and New Zealand’s largest beverage manufacturer to be certified as carbon zero.

One of its core brands, Steinlager, became New Zealand’s first large-scale beer brand to achieve carbon zero certification. To reach this milestone, Lion says it focused on reducing emissions throughout Steinlager’s product lifecycle — from growing the hops and barley, and brewing the beer, to packaging and transport.

Lion has also invested in water efficiency initiatives, reduced its waste, and is making its packaging more recyclable and reusable. Already over 97 per cent of Lion’s packaging materials are recyclable and it is targeting 100 per cent of packaging to be reusable, recyclable, or compostable by 2025.

Finalist: Synlait Milk

Synlait Milk has bold ambitions to be “net positive for the planet” and instrumental in its industry’s response to climate change — a significant feat given agriculture is responsible for 30 per cent of the world’s greenhouse gas emissions and 70 per cent of freshwater use.

Synlait combines expert farming with state-of-the-art processing to produce a range of nutritional milk products for its global customers. It has put sustainability at the centre of its corporate purpose, and in 2018 set 10-year targets and an aspiration to become B-Corp certified — which it achieved last year.

“When we set these bold goals for ourselves, we didn’t know how we would achieve them,” says Hamish Reid, Synlait Director for Sustainability, Brand, Beverages and Cream.

“We are on track to beat our targets that no one thought we would achieve, and beat the timeframe as well. It’s an example of when you are really brave and put yourself out there, people galvanise around that.”

The Top 200 judges say Synlait’s executives are backing ESG strongly, and as a result the company scores well on these metrics.

“In a challenging year for the company, its focus on sustainability has not waned and it remains an industry leader with ambitious ESG targets,” says Top 200 judge Ross George.

“These are ambitious targets, both on-farm and off-farm, and have recently been updated under the Science Based Targets initiative.”

One of these targets is a reduction in emissions from the manufacturing process. Synlait is transitioning to renewable energy and has committed to not build another coal-fired manufacturing facility. A trial last year to replace a coal boiler with renewable biomass has progressed to become a permanent project.

“We now have a very clear path forward. From next financial year, we are commencing our rapid transition off coal,” says Reid. “Our original intention was early next decade, but we now think this will be entirely feasible as early as 2024 or 2025.”

Synlait works with its farmer suppliers to evolve New Zealand’s reputation as a responsible and sustainable producer of food, and help farmers understand how their management of the farm impacts on greenhouse gas emissions.

“This allows us to attract the most innovative farmers that are thinking about the future of the food system and where transitions might be happening,” says Reid. “It immediately gave us a greater supply base, because people were really interested in understanding and working together with the processor on how they might future-proof their businesses for success.”

This has resulted in on-farm emissions intensity, per kg of milk solids, reducing 5 per cent over the last year, or 10 per cent compared to its 2018 base year when its targets were first established.

Total off-farm emissions have remained stable since last year, however the emissions intensity, per kg of product, has reduced by 24 per cent compared to 2018.

“No one thought we would achieve what we have — including ourselves,” says Reid. “We didn’t think it would be possible to reduce our emissions by 10 per cent, and we have already hit the Government’s 2030 target.”

Deloitte Top 200: Chairperson of the Year: Patrick Strange — Chorus, Auckland Airport

Patrick Strange’s positive and inclusive style, together with his proactive leadership role in the business community, saw him crowned as this year’s Chairperson of the Year at the Deloitte Top 200 awards.

During 2021, Strange led a group of senior business leaders that called on Government to be more transparent about its plans to get New Zealand to a “Covid normal”. He says he was motivated to speak up because he was concerned Government was failing to build a long-term strategy.

“We were complimentary about the Government on things they had done, but we did criticise them,” he says. “That is the role of business, that is the role of all New Zealanders — open debate.”
The Deloitte Top 200 judges say Strange is very effective in building relationships with Government for the organisations he chairs — Chorus and Auckland International Airport — which is vital given their importance in New Zealand’s infrastructure landscape.

Chorus has played a critical role over the past year with its fibre network, which has been under significant load with so many New Zealanders working from home during the lockdown.

“We were still connecting 800-900 customers a day, with Covid and all its restrictions,” Strange says. “We don’t hear about it, but they have done a great job not missing a beat under those constraints and added layers of difficulty.”

Strange pushed back on the Commerce Commission over its proposed price control settings for the provider’s ultrafast broadband network, and the returns it should be allowed to make on its regulated asset base. In a letter to the commission, he warned of “regulatory failure” if Chorus was prevented from earning a fair return on its investment.

“We are there to represent New Zealanders — and particularly our shareholders — and I call that out,” says Strange. “I have a constructive relationship with the Commerce Commission and get on well with them — but they know if I disagree with them, I will say it publicly.”

Judge Cathy Quinn, an independent director herself, says this has no doubt been agonising to deal with and required Strange to be heavily involved. But it is clear he did a good job that will allow Chorus to continue to invest in innovation and deliver a fair return to shareholders.

For Auckland International Airport, Strange says the biggest challenge in 2020 was its huge loss of income and the need to rapidly raise capital to redress the balance sheet. But the past year has been much more about people — particularly those that have had to continue operating remotely, which has put a lot of strain on them.

“We are spending a lot of time worrying about how to support people,” he says. “The uncertainty — the way they are having to work — they are working long hours in difficult circumstances.”

His biggest challenge for both companies he chairs has been the loss of exchange that comes from meeting face-to-face. This was also noted as a big challenge by other finalists in this category.
“We can operate well on Zoom, but nothing beats getting together and the things you learn by walking around and talking to staff,” he says.

The judges highlight this emphasis on people as another of Strange’s core strengths. “Patrick is highly regarded by his peers, the management teams he works with and broader stakeholders as an inclusive chair who brings out the best in his fellow directors and management teams,” says Quinn.

“He encourages others to contribute and offers his perspective in a constructive way.”
Strange says this isn’t hard to achieve, because he enjoys working with talented and motivated people — from fellow directors to the impressive young people involved in the companies he chairs.

“We are there to have fun, and I am just part of that,” he says. “I am just lucky enough to oversee a couple of great companies where we have that culture.”

Finalist: Barbara Chapman

Barbara Chapman’s governance career has been shaped by her interest in transformation and improving the experience of customers.

She is chair of Genesis Energy and NZME, and is a director of Fletcher Building and BNZ. Chapman is also deputy chair of public-policy think tank The New Zealand Initiative and was chair of the Apec 2021 CEO Summit. In 2019 she was awarded a Companion of the New Zealand Order of Merit (CNZM) for services to business.

When Chapman joined the NZME board in 2018, it had an enormous amount of debt. “That was really shackling the company from being able to do what it needed to do to grow,” she says.

NZME is now debt-free, succeeding in a three-year plan to eradicate $100m in debt. Its share price reached a high of $1.46 on December 15, up dramatically from its depths of $0.18 at the start of the pandemic.

“Along the way, we were balancing dropping debt with investing in things like premium, and the technology you need to drive that,” says Chapman — recognising that having cash now gives NZME far more scope to invest, such as its recent acquisition of BusinessDesk.

Judge Cathy Quinn says Chapman has shown remarkable skill while working with the board and management team of NZME throughout its transformation.

“Since joining the NZME board in 2018, Barbara has played a key role in the company’s turnaround after financial challenges and helped set foundations for future success.”

The judges also acknowledge Chapman’s leadership in astutely navigating Genesis Energy through the August power outages, as power distributors responded to Transpower’s demand to reduce the burden on the national grid. A ministerial inquiry has since shown that Genesis was wrongly blamed at the time. “As it came out, we didn’t cause any of the problem and we couldn’t have done anything different,” says Chapman. “But given we are 51 per cent owned by the government, quite rightly they were asking us some pretty strong questions.

As for her highlight over the past year, Chapman points to the success of the Apec CEO Summit, held at the end of 2021.

Soon after taking on the role at the request of the Prime Minister, a fire broke out at the International Convention Centre — the intended venue for the summit. Then  Covid-19  struck, thwarting plans to host thousands of delegates in-person.

“To deliver an online event that had the reach it did, as well as the response it had, has been amazing,” she says. “I am really proud that we focused hard on gender balance and diversity with our speakers, and people tell us we ended up with what was the best CEO Summit ever. Over 3000 people watched it — amazing for something online!”

Finalist: Mark Tume

Mark Tume says boards are decision-making engines, and that there is a ‘secret sauce’ in the boards he chairs that makes the whole greater than the sum of its parts.

“To get the most out of a board, it is not about me being a leader, it is about arranging a meeting so you can get the most out of everyone and a contribution from everyone.”

Tume is chair of infrastructure investor Infratil and commercial arm of Taranaki’s largest iwi, Te Atiawa Holdings. He is also a director of Retire Australia, Precinct Properties and was chair of Ngāi Tahu Holdings Corporation until December 2021.

The Top 200 judges say Tume’s performance at Infratil has been excellent, as has been his significant contribution to the Māori economy.

“Tume was pivotal in establishing Te Atiawa Holdings, a new entity being built from the ground up,” says Quinn. “He has been on the Ngāi Tahu Holdings board in three separate instances, stepping down as chair at the end of last year.”

Tume says Māori organisations have a clear view that assets, investments and returns should be seen as multigenerational. He says there’s a real alignment between that thinking and Infratil, due to the nature of the assets needing to last a hundred years or more.

In December 2020, AustralianSuper, Australia’s largest pension fund, put in a takeover bid for Infratil worth nearly $5.4 billion — representing a 22 per cent premium on its closing share price at the time. The takeover bid resulted in a 20 per cent jump in Infratil’s share price, and was ultimately rejected. Tume says the offer materially undervalued Infratil’s high-quality and unique portfolio of assets.

“It wasn’t a hard decision, AustralianSuper’s offer wasn’t a huge premium,” he says, noting Infratil has returned an average annualised shareholder return after tax and fees in excess of 18 per cent since its inception.

“Tume’s ability to navigate challenging issues such as a hostile takeover bid from Australia and remain steadfast in his belief that the offer materially undervalued Infratil’s portfolio, is a clear demonstration of his focus to do what is best for shareholders,” says Quinn.

Infratil also dealt with another significant transaction in the past year — the sale of wind farm operator Tilt Renewables. “We had a tremendous number of board meetings, because we were dealing with a $5b takeover offer at the same time as a $3b sale process of Tilt Renewables,” Tume says. Ongoing restrictions of Covid and the border closure added to the pressure since both deals were run out of Australia.

While this period was a huge challenge due to the need to deal with so many things at the same time, including a change in CEO, completing the Tilt deal was also one of Tume’s highlights of the past year.

“You don’t get many years like this one where so much pressure and stress and bad things are happening — and yet everything lines up so nicely.”

Dynamic Business: Movement in the Top 10 - NZ Herald

The high-level view of the 2021 Deloitte Top 200 Index shows an increase in total revenue from $190,618m in 2020 to $191,527m in 2021 — an increase of 0.5 per cent. This compares to a 1.6 per cent increase in 2020.

Underlying earnings (ebitda) increased from $24,803m in 2020 to $26,374m in 2021. This is an increase of 6.3 per cent, compared to a 7.3 per cent decrease in 2020.

The ebitda margin, an assessment of operating profitability as a percentage of total revenue (total ebitda/total revenue), increased slightly between 2020 (13.0 per cent) and 2021 (13.8 per cent).

Total profits after tax have increased from $6505m in 2020 to $7910m in 2021. This is a 21.6 per cent increase year on year, compared to a 37.3 per cent decrease in 2020.

Net profit margin (profit after tax/total revenue) increased between 2020 (3.4 per cent) and 2021 (4.1 per cent).
Total assets have increased from $253,333m in 2020 to $264,759m in 2021, which is a 4.5 per cent increase, compared to a 9.6 per cent increase in 2020.

The number one spot on the Top 200 Index has been held by Fonterra since its formation in the early 1990s. Fonterra’s revenue increased by 1.4 per cent during the year to reach $20,565m. This increase is mainly due to increased sales volumes.

EBOS Group has maintained its number two ranking, increasing its revenue by 7.0 per cent from $9,241m in 2020 to $9,886m in 2021.
EBOS Group’s increase in revenue is attributed to growth in its community pharmacy, institutional healthcare, contract logistics and animal care businesses. The revenue gap between the top two companies has remained fairly constant, slightly decreasing by 3.3 per cent, as Fonterra (ranked first) had a revenue increase of 1.4 per cent.

Fletcher Building’s (ranked 3rd) revenue has increased by 11.1 per cent from $7,309m in 2020 to $8,120m in 2021, which is a recovery on a drop in revenue of 12.0 per cent in 2020 compared to 2019, which caused it to slip from second in 2019 to third in 2020.
The top 10 has seen some movement in 2021, with Meridian Energy re-entering in sixth place (previously 10th place in 2019 and 11th place in 2020).

Zespri has moved up to seventh place from 12th place in 2020, and Mainfreight now occupies 10th place compared to 15th place in 2020.
These movements in the top 10 see Z Energy moving down from fifth place in 2020 to 11th place in 2021, Air New Zealand moving down from sixth place in 2020 to 17th place in 2021, and BP moving down from eight place in 2020 to 15th place in 2021.

The 200th ranked entity on the Top 200 Index in 2021 is Aurecon, a newcomer to the index, with revenue of $189m.
Last year’s 200th ranked company, Airwork, had revenue of $200m. This is a 5.4 per cent decrease in revenue between 200th ranked companies year on year.

Top profits

  • Fonterra (ranked first in the Top 200 Index) reported the top profit for 2021 at $532m. Last year’s top profit was also held by Fonterra, reporting a net profit of $803m in 2020. This top profit amount has decreased by 33.7 per cent year-on-year.
  • The decrease in Fonterra’s 2021 profit is attributed to non-recurring gain on sale of investments which boosted the 2020 profit by $467m. This has been offset by lower net interest-bearing debt and an increase in sales revenue for Fonterra in the current year.
    In contrast, average profit after tax across all 200 companies has increased from $32.5m in FY20 to $39.5m in FY21, a 21.5 per cent increase.
  • Respiratory products maker F&P Healthcare (22nd) has moved up to second place in 2021, from sixth in 2020, with profit after tax increasing by 82.6 per cent from $287m in 2020 to $524m in 2021.
  • Auckland Airport (139th) has moved up to third place in 2021, from 14th in 2020, with profit after tax increasing by 139.2 per cent from $194m in 2020 to $464m in 2021.
  • Meridian Energy (6th) has moved up to fourth place in 2021, from 15th in 2020, with profit after tax increasing by 143.2 per cent from $176m in 2020 to $428m in 2021.
  • Ryman Healthcare (97th) has moved up to fifth place in 2021, from 7th in 2020, with profit after tax increasing by 59.6 per cent from $265m in 2020 to $423m in 2021.
  • Infrastructure investor Infratil (38th) has moved out of the top profits, from being placed second in 2020, reporting a profit after tax of $509m in 2020, to reporting a loss of $88m in 2021.

Biggest losses

  • The biggest loss for 2021 was reported by hydrocarbon producer OMV (ranked 83rd in the Top 200 Index), with a loss of $567m.
    OMV’s loss is a $614m drop from its 2020 profit after tax of $47m.
  • Pacific Aluminium (58th) and Air New Zealand (17th) respectively hold the second and third biggest losses in 2021.
  • This is reasonably consistent with the loss positions they occupied last year.
  • Pacific Aluminium was third and Air New Zealand was first in the biggest losses for 2020.
  • Air New Zealand’s continued losses are reflective of the decline in profits of the air travel industry caused by the impact the Covid-19 pandemic has had on border restrictions limiting international travel.
  • Tasman Steel (54th) and Lion (71st) respectively hold the fourth and fifth biggest losses in 2021.
  • Kiwirail (64th) has moved out of the top biggest losses, from being placed second in 2020, reporting a loss of $325m, to having a profit in 2021 of $43m.

Most improved profit

  • Agricultural co-operative company Ravensdown (ranked 63rd in the Top 200 Index) recorded the most improved profit out of all the entities on the Top 200 Index.
  • It delivered a 10,213.8 per cent increase in profit from a $0.2m loss in 2020 to a $15.4m profit in 2021. Haier (30th) has the second most improved profit, recording a profit of $29.3m in 2021 compared to a $0.6m profit in 2020.
  • This is an increase of 4,834.3 per cent.
  • NZPM Group (144th) holds third place for most improved profit, with an increase of 2,404.8 per cent. In the current year, NZPM Group recorded a profit of $6.8m, compared to a 2020 profit of $0.3m.
  • There is no overlap in the most improved profit list in 2021 relative to 2020.

Most improved revenue

  • Meat company Hellers (ranked 141st in the Top 200 Index) has reported the most improved revenue, increasing revenue to $269m in 2021 compared to $101m in 2020.
  • This increase has seen Hellers enter the Top 200 Index for the first time.
  • Newcomer to the Index, Wilmar Gavilon (143rd), is ranked second for most improved revenue. Wilmar Gavilon had reported revenue of $172m in 2020 which has now increased to $267m in 2021, representing a 55.1 per cent increase in revenue.
  • Fisher & Paykel Healthcare (22nd) has seen a similar increase in revenue, reporting an increase of 53.0 per cent from $1,273m in 2020 to $1,948m in 2021 which places it third for most improved revenue. Fisher & Paykel Healthcare occupied 16th position for most improved revenue in 2020.
  • Microsoft (72nd) is the only other company to be included in the most improved revenue index for two years in a row.
    A2 Milk and Xero had been included in the most improved revenue index for the last four years, however they are not included in 2021.
  • Pushpay (142nd), My Food Bag (196th), Synnex (190th) and Tasman Liquor (152nd) are new entrants to the Deloitte Top 200 Index in 2021, and also feature in the most improved revenue index.
  • Hellers, Microsoft, Precinct Properties, Synnex and Tasman Liquor are included in both the most improved profit and most improved revenue index in 2021.

Top return on assets

  • Return on assets (ROA) provides an indication of how efficiently a company manages its assets in order to generate earnings. It is calculated by measuring profit against total assets reported.
  • Lotto NZ (ranked 26th in the Top 200 Index) holds the top spot for ROA for the third year in a row after newly entering the Top 200 Index in 2019. It has maintained a strong ROA of 194.7 per cent in 2021 compared to 214.0 per cent in 2020. The high ROA is driven by a 25.5 per cent increase in profit after tax from $333m in 2020 to $378m in 2021, with total assets of $199m in 2021.
  • Holding the second spot for ROA for the second year in a row is TAB (121st) – despite a decrease in its ROA to 94.5 per cent from 102.6 per cent. This is driven by an increase in total assets from $136m in 2020 to $208m in 2021, and an increase in profit after tax from $137m in 2020 to $163m in 2021.
  • Third place is held by newcomer Aurecon (200th) with a ROA of 35.3 per cent.
  • Fisher & Paykel Healthcare (22nd) placed fourth in terms of ROA, rising from fifth place in 2020. Its ROA has increased from 21.8 per cent in 2020 to 29.9 per cent in 2021, which is consistent with its increase in profit.
  • The general trend of increasing return on assets falls in line with the 21.6 per cent increase in average profits, with third to 20th places for 2021 increasing year-on-year against third to 20th places in 2020. Only Lotto NZ and TAB, ranked first and second respectively, saw a reduction in ROA year-on-year.

Top return on equity

  • Return on equity measures how effectively a company can generate income relative to the amount of money shareholders have invested in the firm.
  • It is a useful tool for investors, particularly when comparing firms within the same industry and is calculated by measuring the revenue earned against the average equity held over the past two years – to prevent changes in shareholder contributions skewing the results.
  • Lotto NZ (ranked 26th in the Top 200 Index) has taken the top spot for return on equity, moving from second place in 2020, with a return on equity percentage of 661.8 per cent.
  • TAB (121st), has moved up from third place to second place for its return on equity of 416.5 per cent.
  • Bunnings (31st) has dropped from top spot to third place with a return on equity of 264.7 per cent for 2021.
  • Kiwifruit marketer Zespri (7th) has risen to fourth place from sixth, with a return on equity of 105.0 per cent.
  • Nestle (90th) has maintained its fifth-place spot with a return on equity of 101.9 per cent.

The newcomers

  • This year, 22 companies were added to the Deloitte Top 200 Index. This compares to last year when 13 companies debuted on the Index.
  • Heinz entered the Index at the highest rank (ranked 56th in the Top 200 Index) with revenue of $768m.
  • Also entering the Top 200 Index within the top 100 companies were metals distributor and processor Vulcan Steel (59th) with revenue of $732m, and New Zealand Health Group (70th) with revenue of $639m.

Just missed the cut

  • The 200th place in the 2020 Deloitte Top 200 is Aurecon, which recorded $189m in revenue. In last year’s Top 200 Index, Airwork was ranked 200th with revenue of $200m in 2020.
  • Abano Healthcare (ranked 201st in the Top 200 Index), Whakatane Mill (202nd) and Wilson Parking (203rd) just missed the cut by $1m. Scott Technology (204th), Suzuki (205th) and China Merchant Properties (206th) were close to breaching into the Top 200 Index in the current year, all achieving revenue around the $186m mark. Of these companies, Abano Healthcare and Scott Technology have fallen out of the Top 200 in 2021, previously holding 168th and 182nd place in 2020 respectively.

In last year, not now

  • After its entrance in the Top 200 Index in 2019, Scentre wasn’t in this year’s index (in 2020 it ranked 90th). Until last year, the owner and operator of Westfield retail destinations was in the most improved performance index for two years in a row.
    Shell has also dropped out of the index this year after ranking 149th in 2020. In 2019 it appeared in the top profit index, recording a figure of $1,397m.
  • Kordia didn’t feature in the Top 200 index this year. In 2020 it reappeared on the index ranked 183rd, after falling from the index again in 2019.
  • Horizon Energy (2020: 163rd) and Scott Technology (2020: 182nd) also did not make the list this year after entering last year’s index.

Deloitte Top 200 awards: Top business leaders crowned - NZ Herald

Deloitte Top 200 awards: Top business leaders crowned – NZ Herald

Infratil has been crowned Company of the Year and Skellerup’s David Mair named Chief Executive of the Year at the prestigious Deloitte Top 200 Awards.

Rocket Lab founder, CEO and chief engineer Peter Beck took out the coveted Visionary Leader award.

In its 32nd year, the Deloitte Top 200 Awards are a showcase of the very best of New Zealand business and business leaders. They celebrate the depth and range of our business community, featuring the industries and sectors that underpin our country’s success.

This year, the awards recognise outstanding results despite the ongoing challenges resulting from Covid-19, including companies and leaders from the manufacturing, retail, media, and energy sectors, all showcasing their commercial strength and agility during challenging times.

Infratil had an outstanding year in 2021, further enhancing its reputation as a savvy infrastructure and utilities investor. The company was active with its portfolio, divesting Tilt Renewables and investing in diagnostic imaging firm Pacific Radiology.

The panel of high-profile judges — convened by NZME editorial director of business Fran O’Sullivan — said Infratil’s combination of strong performances with its investment companies, especially data centres, along with its divestments and new acquisitions have added significant shareholder value over 2021.

“In addition, the company went through a fairly seamless transition of CEO from Marko Bogoievski to Jason Boyes and won the takeover battle with Aussie Super,” say the judges.

Infrastructure: Auckland's light rail project poised to take a major step (NZ Herald)

Infrastructure: Auckland’s light rail project poised to take a major step (NZ Herald)

Before the end of this year, the Government will decide on the route, mode, and delivery for the project for the light rail project, which will run between Auckland’s city centre and Māngere, connecting major employment hubs in the city and the airport at each end.

Transport Minister Michael Wood acknowledges the decision has been a long time coming. He first launched the promise of light rail during his campaign for the Mount Roskill by-election in 2016 which brought him into Parliament. Labour campaigned on light rail at the 2017 election, but the move was stymied by Labour’s coalition partner New Zealand First in the last term of Government.

“It is no secret that it was in a fairly challenging stage at the end of the last term, and it had the political knockback between parties,” Wood says. “We had to have a reset which is effectively what happened this year. But it’s put us in a good position to take it to the next stage.”

The three options under consideration are:

• Light rail, a modern tram on city streets;
• Light metro, underground in a tunnel under the isthmus, and underground in Māngere and Onehunga, and at street level in other areas; and
• Tunnelled light rail, underground from Wynyard Quarter to Mt Roskill, and then up at street level to Auckland airport.

They were chosen after an assessment by the Auckland Light Rail team from over 50 different options for modes and routes against the project’s three objectives: improving accessibility, reducing Auckland’s carbon footprint, and unlocking urban development in the corridor.

Not a simple decision

Infrastructure: Credit for green credentials

Green finance is an important focus for ICBC. Kevin Xu explains to Tim McCready how the bank is active in global sustainable financial governance, learning from international practical experience, and contributing financial power to serve the sustainable development of the economy, society and environment.

Herald: ICBC’s attention to environmental, social, and governance (ESG) factors is growing. How is this affecting the bank’s involvement in international infrastructure projects?

Kevin Xu: ICBC has fully integrated ESG and green financial management into its investment and financing processes. Our head office has formulated green investment and financing policies for 16 sectors and nearly 50 industries, including infrastructure construction, and has positioned key areas such as green transportation, clean energy, energy conservation and environmental protection as active or moderate entry into the industry.

Environmental, climate and social risks arising from the credit granting process have been brought under classified management. Differentiated credit policies have been implemented in domains such as economic capital occupation, authorisation, pricing, scale, and a “one-vote veto system” is used for environmental protection. Green management requirements are extended to a wide range of investment and financing businesses lines such as bonds, wealth management, leasing.

ICBC New Zealand follows head office’s approach and has been actively involved in local infrastructure projects. More than NZ$300 million in loan commitments has been provided to support NZ renewable energy, sustainable projects in the past 12 months.

Herald: What factors do you take into account when integrating ESG factors into investment decisions?

Xu: We pay close attention to hazards and related risks that financing customers and related parties may bring to the environment and society in construction, production, and business activities. This includes energy consumption, pollution, land, health, safety, resettlement, ecological protection, environmental and social issues related to climate change.

ICBC implemented the “one-vote veto for environmental protection”for the entire investment and financing business process. The customer credit risk rating has embedded ESG factors.

Environmental risk factors are included in the customer rating model, including corporate environmental credit rating and green credit classification index. For corporates that are environmentally unqualified or unfriendly, the rating model will prescribe a limit to the customer’s credit rating.

The customer rating model covers governance risk factors, and incorporates corporate governance and corporate management indicators, including corporate governance structure, shareholder control, and related party transactions.

The inclusion of negative environmental events in the rating and early warning monitoring system, including factors such as environmental violations.

Our head office also clearly requires relationship managers to prudently evaluate the environmental and social risks of customers during the due diligence process and has introduced relevant supporting policies and systems.

Herald: What else does the bank take into consideration for infrastructure projects?

Xu: We also consider credit risks, market risks, country risks and other related factors that may affect investment safety and returns.

ICBC implements a unified credit risk appetite for all types of credit risk exposures across the bank, and implements full-process management of credit risk, covering the entire process from customer investigation, credit rating, loan evaluation, loan review and approval, loan issuance to post-loan monitoring.

For cross-border investment and financing, we also need to pay attention to the country risk of the country or region where the counterparty is located. ICBC uses a series of management tools to manage and control country risk, including country risk assessment and ratings, country risk limits, country risk exposure statistics and monitoring, and stress testing, etc.

Anti-Money Laundering is also the focus of our attention in handling investment and financing business. We strictly abide by relevant Anti-Money Laundering laws and regulations and steadily promote customer identification governance and high-risk areas management.

Herald: What impact has the pandemic had on ICBC’s infrastructure projects?

Xu: The outbreak of the pandemic and its prolonged duration have had varying degrees of impact on many industries, including infrastructure, and some projects are facing a certain degree of difficulties in supply chain operation and capital turnover.

ICBC actively fulfils its responsibilities as a corporate citizen by coordinating the prevention and control of the pandemic, financial security, and operation and management, and actively carrying out special activities to ensure the sustainability of the supply chain of large enterprises and the uninterrupted capital chain of small and medium-sized enterprises.

In the global fight against the pandemic, we will fulfil our responsibility, demonstrate our care and concern, and protect our beautiful home together.

Yangjiang Nanpeng offshore wind farm

ICBC approved a loan of RMB 1.6 billion yuan for the Yangjiang Nanpeng Island offshore wind farm project.

The 401.5MW project features 73 wind turbines and is the first single large capacity offshore wind power project in China. It is also the first offshore wind power project in Guangdong Province that is more than 10 kilometres away from the coastline and more than 10 metres deep.

Completed at the end of last year, the offshore wind farm can generate 1.015 billion kWh of annual on-grid power. This is expected to save 311,500 tons of standard coal and reduce carbon dioxide emissions by 828,800 tons every year.

Dubai solar thermal power plant

ICBC is the lead arranger for the construction of one of the world’s largest and most advanced solar thermal power plants.

The 700MW concentrated solar power and 250MW solar photovoltaic power station in Dubai has been jointly invested by Dubai Electricity and Water Authority (DEWA), ACWA and Silk Road Fund.

With a total investment of US$4.3 billion, the project is the largest new energy project financing in the world and has been highly recognised by the market. As the lead bank, ICBC arranged a US$2.5b senior syndicated loan with members from China, Europe and the UAE.

Concentrated power systems generate solar power by focusing a large area of sunlight into a small area.

The light is converted to heat, which is stored in molten salt to supply electricity on demand during the day and through the night.

This method of power generation makes up for the instability of solar power generation and the impact on power grids and ensure the stability of power supply.

The power plant is an important project under Dubai’s clean energy strategy and is expected to provide clean power to more than 270,000 households in Dubai every year, with zero emissions of carbon and pollutants.

The power plant will reduce carbon dioxide emissions by 1.6 million tons and will create 4000 direct jobs and more than 10,000 indirect jobs, providing local employment and economic development.

Baodi district solid waste power generation

With the increasing volume of municipal solid waste in Baodi District, Tianjin, China, the capacity of the original landfill site was not able to meet the needs of the community. To solve this problem, Tianjin Quantai Domestic Waste Treatment launched a domestic waste incineration power generation project.

ICBC granted a loan of RMB255 million yuan to assist with construction. The project began operations in December 2020 and has changed the method of domestic waste treatment from landfill to incineration. It is preventing the pollution of domestic waste into the soil and underground water sources and reducing reliance on fossil fuel-based power and heat sources and CO2 emissions by using waste as a resource for power generation.

• Kevin Xu is Team Head, Corporate & Institutional Banking at ICBC New Zealand.

ICBC is a sponsor of the Herald’s Infrastructure report.

APEC CEO Summit 2021: Highlights and insights

The full APEC CEO Summit is now available to watch, free, here.

Over two days in November, the world’s most influential political, business and thought leaders came together for the APEC CEO Summit 2021 to discuss ways the region can learn from each other and work together and to ensure it emerges from the pandemic stronger than ever.

The Summit addressed challenges and opportunities presented by the current situation, with a focus on five themes: the state of the world with, and post Covid; the digital disruption opportunity; the primacy of trust; the future of energy; and the sustainability imperative.

The state of the world with and post-COVID

The Summit was set at a complicated economic period as the world rebuilds in the wake of the pandemic. Just a year prior, the region’s economy saw a record contraction of -5 per cent, with estimates suggesting the Asia-Pacific lost over $2 trillion in potential trade over 2020.

This downturn was both faster and deeper compared to the global financial crisis – although will likely be shorter. Demonstrating this rapid turnaround, the last quarter saw record growth of 10 per cent in the region.

Keynotes from PwC global chair Bob Moritz and OECD Secretary-General Mathias Cormann, along with Dr Alan Bollard’s panel discussion on the economic state of the world helped to decipher the recovery and set the scene for the Summit. While the tone from speakers was optimistic, they cautioned the economy is still significantly impacted by the ongoing disruption of the pandemic and can be seen reflected in myriad contradictions.

The dramatic increase in trade is predominantly occurring in merchandise, with the region experiencing a chronic shortage of goods to meet demand, yet services trade is still worryingly negative.

  • Domestic investment has been increasing, but foreign direct investment is at a 20-year low.
  • Costs and wages are increasing, but productivity is stagnant.
  • Jobs are being displaced, but skills shortages are being reported widely across the region.
  • Uncertainty and significant downside risks remain, including inflationary pressures and the emergence of new Covid strains, vaccination levels and continued disruption from the pandemic – including the fourth wave beginning to sweep through Europe.

But the recovery is also providing the region tremendous opportunity – particularly for those businesses able to adapt and grow quickly and create supply chains that are robust and scalable.

Prime Minister Jacinda Ardern, this year’s APEC chair, said in her opening address:

“We have a saying in New Zealand. He rau ringa e oti ai – many hands make light work.

“The heavy load of a global pandemic that in equal measure threatens lives and livelihoods has been countered only with an extraordinary commitment to unity, partnership and progress in spite of the challenges.”

Former New Zealand Prime Minister and Administrator of United Nations Development Programme Helen Clark shared a similar sentiment, reminding delegates that they must work together and grab hold of the positives that can come from standing up to a crisis.

“We can strengthen our national systems for pandemic preparedness and response, and we can strengthen the global systems. All of that is good for business,” she said.

“If we are looking at the world we are trying to create, inclusion going forward is critical. But we must also build in resilience. Because if we don’t have resilient systems like with pandemic preparedness and response, we will repeat these lessons over and over.”

Recently elected President of Peru, José Pedro Castillo Terrones, shared a similar view, noting the APEC forum “is an important space for coordinating measures and identifying good public policy practices to face complex health and economic challenges.”

The digital disruption opportunity

While all economies across the APEC region have been impacted by the pandemic, there is clear evidence that those with digital readiness endured the pandemic and rebounded better.

Economies with both physical and digital infrastructure have been faster to deploy digital tools in the fight against Covid-19 – including contact tracing, proof of vaccine and digital trade facilitation – which has enabled them to keep their economies more open.

The pandemic acted as an accelerant and removed hurdles for innovation. Five years’ worth of technology adoption occurred within the first eight weeks of the pandemic, and the importance of its role as an enabler of trade was reiterated in almost every session at the Summit.

“The companies without digitalisation have been hit harder,” said Diane Wang, chair and CEO of DHGate. “They are at a crossroads… the choices we make today will have consequences on gender equality, digital equality and inclusive growth, for decades to come.”

In her keynote address, technology entrepreneur Amber Mac cautioned CEOs that “it may feel like there is a thick line between what you do and what big tech does, but as you embrace a tech-first strategy – an obvious path to succeed in today’s digital world – that line will soon begin to blur.”

Companies, government, and the public sector were urged to continue to seize the opportunities from digitalisation, with a heavy emphasis that the economic recovery post-Covid will continue to be digitally enabled.

Micro, small and medium enterprises (MSMEs) are particularly vulnerable to the economic impacts of the pandemic. With MSMEs making up over 97 per cent of all enterprises in the region and employing over half the workforce, digital adoption and access to innovation and will be essential for all business.

This was highlighted by Singapore Prime Minister Lee Hsien Loong, who stressed that most SMEs are not as digitally prepared as large businesses, and risk being left behind. “APEC economies must help SMEs and their workers make the digital transition,” he said.

He also acknowledged that the rapid uptake of digital innovation means that APEC economies need to do more to invest in the digital frameworks of the future, including digital identity, digital payments solutions, data exchange, data authorisation and consent.

Australian Prime Minister Scott Morrison used his address to express his concern over the rise of technology, and the ability for it to be used for bad, as well as good.

Morrison called for stronger rules for the tech sector and suggested it would be better for the sector to work in partnership with governments on regulation – saying that if not, governments will do it anyway, and “will stuff it up because they don’t understand it the same way.”

The primacy of trust

Along with digital adoption, the pandemic has also accelerated the erosion of trust around the world. There is an epidemic of misinformation and widespread mistrust of societal institutions and leaders around the world.

This extends to business, and as trust expert and public relations leader Richard Edelman told the Summit, earning trust has never been more important – or more challenging.

He described how employees have emerged as the most important stakeholder in business, with people “voting with their feet” and making major decisions – including what they buy and who they work for – based on personal beliefs.

The growing expectation of business to focus on societal engagement with the same rigor, thoughtfulness and energy used to deliver on profit was evident from delegates – the primacy of trust quickly became the most interactive session at the Summit, attracting robust discussion through the conference platform.

Edelman explained how consumers, employees and other broad stakeholders are paying more attention to what businesses say and do, and how they respond to issues including climate change, racial injustice, and other societal issues.

Intrinsically tied into trust is the need for business to apply environmental, social and governance (ESG) principles to their strategy and operations to create value for all of society.

Reiterating Edelman, the ESG panel told the Summit that there is now a much broader group of stakeholders that must be considered, including employees and the community. But beyond this, there is a growing consensus that ESG has become an extremely powerful driver for business success and financial return and is no longer seen as something that only adds costs to business.

The panel called for business leaders across the region to put ESG front and centre, integrating the principles into the purpose and values of an organisation and ensuring their commitment is actionable, verifiable, and transparent.

“The actions required are expensive, substantial, and they have to be core to an organisations strategy,” said McKinsey’s Andrew Grant. “They can’t just be window dressing or a box-ticking exercise.”

The panel said that businesses must lean in and recognise that doing good for society is also good for business.

This call for business to be a force for good in the world was repeated in the highly anticipated keynote address from international human rights lawyer Amal Clooney. She told delegates that we no longer live in a world where businesses can say ‘human rights are none of our business’.

“It is increasingly difficult for companies to say ‘we are just here to make a profit’ and bury their heads in the sand,” she said.

“Businesses, big multinational corporations, and tech companies in particular are a key part of our multilateral world of decision-makers, and each one will decide whether to be a force for good or complicit in abuses of power.”

The sustainability imperative

The Summit was unique this year, with a political leader from outside the 21 APEC economies asked to give a perspective from outside the region. The conversation between German Chancellor Angela Merkel and New Zealand Prime Minister Jacinda Ardern traversed the state of the world, Covid-19, digital innovation, sustainability and leadership.

While the discussion gave many fascinating insights, one of the key points raised was the need to take the lessons from Covid-19 and to apply them to other critical areas. The pandemic forced governments and businesses to act with urgency and in partnership with different sectors and communities who know their people best.

This same principle could be applied to manage other world problems, including climate change, scaling the uptake of renewable energy, and dealing with pressing environmental and biodiversity issues.

“Never before have we been able to realise how interconnected we are globally,” said Merkel.

“What is happening here influences what is happening in Africa, in New Zealand and in the United States of America. That sense of how small our globe actually is when it looks to the spread of such a virus should continue to guide us when we tackle issues like biodiversity and climate protection.”

This message was echoed by Canadian environmentalist Dr David Suzuki, who gave a deeply passionate keynote address. He told attendees that the planet is “at code red – and that spells trouble for humans.”

“Nature pays no attention to human laws and borders,” he said. “We are animals. If we don’t have air for three minutes we die and if it is polluted, we get sick. But we use air as a garbage can for toxic waste. We must show reciprocity and responsiveness so nature can continue to be abundant and generous.

“Success as a species is to look ahead, recognise dangers and opportunities and choose a deliberate path to avoid danger.”

Viet Nam President Nguyen Xuan Phuc affirmed the strategic importance of sustainable development and climate change response for the region.

“Our green planet is shaken by cumulative and unprecedented impacts caused by climate change, extreme natural disasters, environmental degradation, and the COVID-19 pandemic,” he said.

“Time is not on our side, for these challenges continue to worsen with every passing day. Thus, we need to work closely together to overcome such hardships.”

A similar call was echoed by President of the People’s Republic of China, Xi Jinping.

“APEC economies should make its post-pandemic recovery a green one and take the lead in making a science-based response to climate change,” he told the Summit – just hours after announcing a surprise plan with the US to work together on cutting greenhouse gas emissions in the crucial next decade.

The future of energy

The APEC region demands around 60 per cent of the world’s energy consumption, and transitioning to new forms of clean energy production and consumption will be an essential part of meeting our climate change challenges.

In her keynote address on future energy challenges, Tesla chair Robyn Denholm told APEC economies that they must act now to accelerate their transition to renewable energy to power utilities, vehicles, communities and homes.

“We all succeed or fail together in the race to zero emissions,” she said.

Denholm said the growth in electric vehicle sales was encouraging, but it would be a steep climb to eliminate combustion engines. Getting there would require a joint effort between the public and private sector, with significant capital investment and supporting policies that set standards and deadlines on emissions to accelerate the transition.

“Vehicle pollution reduction will be only as fast as our ability to ramp up battery production and EV manufacturing,” she said.

In the panel on future energy solutions, Blackrock managing director for renewable power and sustainable investing Dr Valerie Speth, told delegates that there is no topic ranking higher than climate change and decarbonisation among her colleagues and investors.

“It is the best investment opportunity for the coming decades,” she said.

A similar message was shared by President of the Republic of Korea, Moon Jae-in. His administration has closed domestic coal-fired power plants, stopped permits for new ones and cut public funding for new overseas coal power plants.

“Instead, we are expanding the use of safe and clean energy,” he said. “By 2025 we will have more than doubled solar and wind power facilities from 2020 levels.”

South Korean companies are making a $37 billion investment in and exploring partnerships on all aspects of the hydrogen economy from production to distribution to end use.

He said that as an economic forum that represents 61 per cent of world GDP, APEC “will stand at the forefront of cultivating the hydrogen economy ecosystem.”

Looking to the future

The Asia-Pacific region is home to 270 million indigenous people, making up around 70 per cent of the world’s indigenous population. Yet the full potential of the community’s contribution to the region’s economy remains largely untapped and was disproportionately impacted by the pandemic.

The panel on the indigenous economy featured speakers from Aotearoa New Zealand, Canada and Australia, and discussed indigenous leadership and the ethos of putting culture at the centre of decision making.

Rangimarie Hunia, chief executive Ngāti Whātua Ōrakei Whai Māia, told the Summit that indigenous people have values and approaches that are ancient.

“When we start to be in the game of business, we take those values and we apply them to the long-term, not the short,” she said. “When I hear things like planet over profit, that has been our way of doing since time immemorial.”

Continuing the theme of ‘looking to the future’ was a focus on young people, who make up one-third of the region’s population. The Summit had the most ever young people attend as delegates, as well as many younger voices featured in keynotes and panels throughout.

One of the most inspiring keynote addresses came from Jerome Foster II – aged just 19 and the youngest ever adviser to a US President.

Foster was appointed to President Biden’s Environmental Justice Advisory Council after spending every Friday for 58 weeks campaigning for the climate outside the White House during Donald Trump’s presidency.

He encouraged other young people attending the Summit to know that they “have so much potential… this is the perfect time for you to really step into that, and to merge your passion with what you want to do for a living.”

“As a young person it often feels like you’re inheriting an Earth that is completely backwards,” he said. “But it is now our role to figure out how we are going to make that better.”

It is the next generation, after all, that are the biggest stakeholders in the work that APEC is doing.

Watch Tim McCready and panel: Fran O’Sullivan, Brent Wilton and Hannah Pattullo discuss what was learnt at the 2021 APEC CEO Summit.

 

APEC CEO Summit 2021: ‘What have we learnt?’ panel (video)

APEC CEO Summit 2021: Jerome Foster II interview (video)

APEC 2021: The Kiwi women moving the world forward at Apec 2021 (NZ Herald)

APEC 2021: The Kiwi women moving the world forward at Apec 2021 (NZ Herald)

Women’s economic empowerment has been a key pillar of Apec’s work, and since New Zealand last hosted Apec two decades ago, has made significant gains.

Economies across Apec have worked together to promote those with “untapped economic potential” — people who have faced barriers to full economic participation — to provide the energy and vision for future growth.

A key focus of this work has been addressing the structures that hold back women’s full economic participation. While there is still significant progress to be made, as this year’s host New Zealand is leading the way with three women — Andrea Smith, Barbara Chapman, and Rachel Taulelei — holding pivotal roles to deliver the year’s event.

Andrea Smith

One of the key diplomats leading New Zealand’s year as Apec host is Andrea Smith, Apec deputy secretary at the Ministry of Foreign Affairs and Trade.

She has been in the role since 2017, and in that time has seen events that have put New Zealand’s hosting of Apec at risk — including the fire at the Sky City International Convention Centre fire where the CEO Summit was originally to be held, and the Covid-19 pandemic, which ground travel to a halt and forced Apec to go fully virtual.

Smith says that as host, New Zealand is at the leading edge of shaping the agenda for the Asia-Pacific and has “skin in the game”.

“Fourteen of our top 20 export markets are Apec members, including the three largest economies in the world — the United States, China and Japan — and 18 of our 19 free trade agreements are with Apec partners.” says Smith.