PRIZE DRAW & SUMMIT CLOSE
Prize draw courtesy of Air New Zealand
Mat Bolland Chief Corporate Affairs Officer Air New Zealand with Auckland Business Chamber General Manager Events and Marketing Natalie Woodbridge
Conference close Tim McCready
KIWI VALUES KEY TO NEW NEW ZEALAND STORY
David Downs CEO New Zealand Story
New Zealand Story Group was established to enhance New Zealand’s reputation beyond natural beauty. In a competitive global economy, reputation matters. And it’s important for a country like ours, with an economy that relies on the strengths of its exports, to continue to grow and diversify.
The more we can do to ensure we’re all telling a broad, compelling and aspirational story about New Zealand, that’s grounded in our values and resonates with the world, the greater chance we have of attracting people to all that we offer.
Moderator: Tim McCready
Moderator: Tim McCready
PETER BECK Founder and CEO Rocket Lab
Founder and chief executive of Rocket Lab, Peter Beck, gave the opening keynote for the New Frontiers session at the US Business Summit. Peter is a pioneer in New Zealand’s accession in the space industry, growing to become a leading player in space, redefining the industry with the rapid and cost-effective delivery of innovative, high-quality technology.
Rocket Lab has deployed 110 satellites, with its Electron rocket the second most frequently launched US rocket annually, delivering mission success for commercial and government satellite operators.Speaking on the eve of the launch window for the CAPSTONE mission to the Moon, Peter shared with Summit attendees how his business has launched New Zealand into the forefront of deep space.
The year ahead is packed with missions, including the first launch to the moon from New Zealand’s Mahia Peninsula. Through this collaboration, Rocket Lab is demonstrating the strong partnership between New Zealand and the United States in this new frontier, as well as the leading role private business can play to forge bilateral relationships and pave the way for new areas of government collaboration.
Peter discussed how Rocket Lab has helped pave the way for New Zealand businesses to think bigger than our own backyard. Last year it listed on the Nasdaq Composite Index and has demonstrated that there is nothing holding New Zealand business back from becoming significant global players in new and exciting industries.
Moderator: Tim McCready
CALL TO ORDER
Tim McCready, MC
After almost six years as Mayor of Auckland, Phil Goff has decided to end to his 41-year political career and will not seek re-election in October.
After two terms leading the Super City, he points to his achievements: Auckland Council has maintained its credit rating through prudent borrowing, it pays its employees a liveable wage, the Central Interceptor is on track to reduce wastewater overflows into waterways, funding is available for transport infrastructure has nearly doubled, and the Unitary Plan has unlocked future housing growth.
“Environmentally, economically, infrastructure-wise, there have been some big steps forward — notwithstanding the difficulty of the environment in which we’re operating,” Goff says.
But it is the pandemic that has been the most dominant factor in his mayoralty, contributing toward his biggest challenges and regrets.
“My greatest regret would be the impact that Covid has had in delaying or holding up the changes that we were busy making,” he says.
“Suddenly it came along and ripped $900 million out of our revenue — and that’s ongoing.”
Auckland Council has warned of its worsening finances. Earlier this month it released a statement indicating the impact of the pandemic on its revenue is a result of a slower than expected recovery in revenue from public transport, events and facilities, and a slower recovery of dividends from Auckland International Airport.
On the cost side, it said payments to staff and suppliers, finance costs and depreciation expenses are all increasing faster than anticipated.
Considerable savings have been made. Last year, the council found $126 million in cost savings and budgeted a further $90m this year and beyond.
“We have sold surplus assets, and we’re looking at what we might do with carpark buildings and various other buildings that aren’t critical to what we do,” Goff says.
“We are going to have to focus on what our priorities are.”
Further mitigations being considered include the deferral of non-critical capital expenditure projects that are not yet subject to contractual commitments, permanent operating expenditure reductions, and fully utilising the $127m in central government Better Off funding associated with its Three Waters reform to fund operating expenditure, and possible future rates increases.
“It has been bloody tough,” says Goff. “And it has meant we couldn’t fully realise the dreams and ambitions we had.”
“But having said that, when you look at similar councils like Tauranga with the same growth problems as Auckland, we have had stable governance, we have got through our business and had clear majorities for our budgets, and the council has been in safe hands.
“There are those things to celebrate — but the job has been really tough because of the environmental circumstances that we face.”
Not enough progress on homelessness
One of Goff’s cornerstone commitments before becoming mayor was to end Auckland’s chronic homelessness. But it will be obvious to anyone that has visited the city centre over the past year that sufficient progress has not been made. The mayor accepts this. But he says Auckland Council’s instruments are limited.
He says a significant problem is the lack of housing — not enough homes were being built when the city was growing rapidly.
Statehouses were sold off, and the cost of housing in Auckland has risen.
There is movement. Kāinga Ora is creating a pipeline of small, medium and large-scale housing developments in Auckland over the next 10 years and the Auckland Unitary Plan allows for 900,000 dwellings to be built within residential areas.
Goff is a big believer in Housing First, an initiative tasked with ending homelessness that he has supported since 2017.
It provides housing to the homeless, but also wrap-around support that addresses the causes of their homelessness and helps to provide stability.
Goff was instrumental in converting council building facilities during the Covid-19 lockdown to help provide meals for the homeless. “But we need to do more of all of these things,” he says. “Because we’re still we’re still a long way from tackling the problem of rising homelessness.”
Working with different governments
In his time as mayor, Goff has worked with three different Prime Ministers: Sir John Key, Sir Bill English and now Jacinda Ardern.
He says his role as mayor is to work for whoever is in government.
“I don’t care what someone’s political background is, as long as they are there and willing to use their integrity, energy and determination to tackle the problems and not simply play politics with it.”
A former Labour MP for 32 years, Goff said the shift from a National-led government to a Labour-led government had some advantages.
“I can pick up the phone and ring Jacinda, I can ring Grant Robertson, I can talk to Michael Wood,” he says.
“That’s not to say that I can ask for something and they’ll say, ‘of course Phil, we will give it to you,’ but at least I can pick the phone up and talk to them.”
When Goff campaigned in 2016 to get rid of plastic bags, he couldn’t make it work with the supermarkets and didn’t have the power to force them. But he was able to speak with the government, and they brought in enforceable legislation which he says has been a huge benefit environmentally.
“That doesn’t mean there hasn’t been areas where I’ve had strong disagreements with government — Three Waters is one of them,” he says, noting that he understands why the government wants to reform water services but doesn’t support the form that reform has taken.
“I’ve argued consistently and strongly — and although I haven’t won the battle, I have been able to talk on a personal level with an understanding and a mutual respect with ministers that I’ve known for a long period of time.”
The job’s not done yet
With six months left on the clock in his current role, Goff says he is not done yet.
In the wake of the latest Intergovernmental Panel of Climate report, he says it is clear that the time to act for the climate is now.
“We are seeing more frequent and severe weather events, we had our hottest year on record last year, and I wouldn’t be surprised if this year exceeds even that.”
Goff’s council has put money into electric buses, is converting its ferry fleet from diesel to electric, is putting money into cycling and walking, and is planting trees to provide shade and increase Auckland’s canopy cover.
But he says this is the start of the solution, and more needs to be done.
“What worse time to try to find funding to deal with the impact of climate change than when you’re dealing with Covid?
“You’ve lost revenue, and your costs have gone up,” he says. “It is easy to say Covid is the big problem at the moment, and we’ll do climate tomorrow.
“But tomorrow is when our kids grow up. If we don’t act, it’ll be harder and more expensive and economically and environmentally more disastrous.”
Goff has proposed a climate action targeted rate of $1.12 a week for a median-value residential property. This is expected to raise $574m over 10 years and unlock a further $471m through central government co-funding and other sources, ringfenced for direct climate action to cut Auckland’s emissions and respond to extreme heat.
“The council we are handing over will hopefully have funding to tackle the problem of climate change, one of the predominant problems that is confronting our city, our country and the whole planet,” he says.
Councillors will vote on the decision as part of the annual budget in late June.
Goff is, of course, just one vote out of 21.
But he says the council has consulted with people, taken submissions and done polling. “I believe there is public support to make this happen,” he says.
“This is something we are doing for the long term.
“Too often people say the trouble with parliamentarians and councillors only think in three-year terms — and too often we do. This has the chance to act with a longer timeframe in mind.”
Taking Sir John’s advice
It was just after Goff’s first month as mayor that Sir John Key resigned as Prime Minister.
Goff laughs that the way Key departed might have inspired his decision to go.
“He had been in my office a week earlier and I thought, ‘he’s looking remarkably relaxed, what can be causing that?’…
“Maybe he was the role model for me — make sure you stand down while you might still be wanted, rather than waiting to the point where you’re not!”
Reflecting on his time as mayor, Goff says he has been lucky to have had people around the council table that have worked with him on things he has wanted to achieve, and he is grateful for that.
“Because in the end, success is a collective endeavour.
“The mayor might be the person at the top of the heap, but he or she is not the only person there, and it relies on that team.”
To pass his final budget, he will need them on his side.
“It might be the last six months of my mayoralty, but it won’t be the easiest six months of it,” he says.
“I’ll be working out right up to the last moment.”
Tim McCready talks to Gary Blick, Auckland Council’s new chief economist about Auckland’s long-term performance and the pandemic’s impact on the city centre.
As Auckland Council’s chief economist, Gary Blick assists Council staff and elected officials to evaluate the economic implications of policy and infrastructure proposals. This means assessing the likely impacts on society’s resources and wellbeing over time – including the financial, social, environmental and cultural aspects.
Originally from Southland, Blick has been in the role since late last year and has lived in Auckland for the past decade. He is particularly interested in the long-term performance and trends of the region and thinks a lot about the wellbeing of Aucklanders now and in the future, and the legacy we will leave them. He says this includes not only those that migrate to the city, but the children and future generations that do not have a voice here yet.
“I often think about the generation I am – what did we inherit? A lot of great things, but then you think about missed opportunities,” he says.
“It is very easy to get caught up with where we are now in terms of the economic cycle and what is happening with housing this month or this quarter, but I am particularly interested in where we have come from, and where we are heading over the long run.”
Blick says for Auckland to be successful in enhancing living standards for residents, including future generations, cities need to get a couple of foundations right.
“For me it is about using our land efficiently and improving accessibility in terms of how we get around,” he says. This means enabling more people to live in locations with good proximity to job opportunities, transport links and amenities. “Many other things matter too, but getting those things right matters a lot because they are the foundations for everything else.”
The Unitary Plan, implemented in 2016, has helped Auckland to take important steps forward with its land use and transport links, including enabling more opportunities to build multi-unit dwellings such as townhouses and apartments.
“All else being equal, having more development opportunities enabled and a more responsive supply of dwellings is supportive of improved affordability over time,” Blick says.
He points to econometric research into construction activity trends that shows, relative to plausible counterfactuals, there was a material boost to supply following the Unitary Plan. He says this likely contributed to the stabilisation of Auckland house prices from 2017 to 2019.
But he acknowledges that events over the past couple of years have complicated the situation, and says it feels like housing affordability took several steps forward with the Unitary Plan, but a step or two back recently with house prices increasing approximately 40 per cent over the past two years.
“The pandemic crisis caused central banks everywhere to head off a drop off in demand and introduce low interest rates to try and stimulate activity and maintain employment. That enabled people to bid a bit more for houses,” says Blick.
“Then with rising case numbers and public health restrictions, we have seen disruptions to supply chains globally, as well as the closing of the borders and a reduction in cross-border labour flows.”
This is problematic because since before the pandemic, Auckland has been losing more residents to elsewhere in New Zealand than it has gained. There were net losses in internal migration in 2019 (11,400 people), 2020 (11,100) and 2021 (13,500), showing that plenty of people judged they would be better off living in other regions and raising a question about Auckland’s overall liveability.
Blick expects the border reopening will see population growth resume as migrants and New Zealanders with needed skills arrive or return to the city, but he cautions that if Auckland isn’t doing as well as it could be then the city may miss out as those with needed skills compare Auckland to other places.
“Liveability and productivity depend on many factors, but it is reasonable to ask whether Auckland can do better on the fundamentals of land use and transport networks,” he says.
The impact of the pandemic has been uneven across businesses.
“The city centre is home to many large professional services and financial services firms that have big office-based workforces with perhaps more flexibility to adapt and adopt remote working,” says Blick.
“Often their customer base is not foot traffic on the street, it is with other businesses and may involve exporting services to elsewhere in New Zealand.”
Even so, GDP – as the measure of the economic output of all businesses in the city centre – decreased by 4.6 per cent for the year to March 2021 – more than the decrease of 2.8 per cent for Auckland as a whole.
But it is the hospitality, retail and events-focused businesses that have borne the brunt of the loss in visitors to the city centre. Heart of the City data last month showed that city centre spending was down more than 40 per cent on the same time last year, and pedestrian counts were almost 50 per cent down.
“Household spending has held up well, but the city centre has lost out as spending has been reoriented to other locations, whether that is online or other centres of Auckland,” says Blick.
While employers and workers have become more comfortable with remote working, he doesn’t expect this to have a permanent devastating impact on the city centre.
“Having that choice may suit some workers and it may mean there are fewer visits on a daily basis from people in the near term relative to before,” he says. “But not all jobs lend themselves to being done remotely on a permanent basis, and people joining the workforce and those starting in new roles may seek in-person collaboration and opportunities to build up their connections.”
The city centre is comparatively very accessible, Blick says, and the concentration of people and businesses in proximity can deliver productivity gains known as agglomeration benefits.
Proximity promotes ease of access, lower transport costs, and knowledge sharing, and a higher population density enhances proximity benefits by supporting deeper labour pools and specialisation among suppliers. As a result, cities can offer higher-paying jobs, as well as more choices in consumption and leisure.
It is this that Blick says will stand Auckland in good stead for the economic recovery post-Covid.
“There’s a good case that the reduction in visits to the city centre will be made back over time, because of its long-run trend growth in density, economic activity and jobs.”
The business climate has been anything but predictable over the past two years.
The Covid-19 pandemic has caused upheaval and seen companies scramble to adapt to a rapidly changing environment — the most visible changes have been the rapid uptake of digital technologies and the rise of remote and hybrid working.
That unpredictability looks set to continue, but there are several underlying trends for businesses to keep in mind as they navigate the year ahead.
In response to Russia’s invasion of Ukraine, the US and EU have cut selected banks from Swift and closed airspace to Russian planes. Further sanctions have been imposed on Russia’s central bank, aimed at preventing it from accessing reserves.
While the crisis might be on the other side of the world, the economic impact will ripple through the global economy and reach NZ shores.
Russia is the world’s second-largest exporter of crude oil and refined petrol, and the world’s largest exporter of natural gas. Global crude oil prices have already reached their highest levels since 2014, and it is expected that prices will go even higher as the conflict persists. This will impact fuel, supply chains, and the cost of goods in general.
Businesses should also brace for cyberattacks, which many predict Russia will use in response to sanctions. NZ’s National Cyber Security Centre (part of the GCSB) recently released an advisory encouraging nationally significant organisations to consider their security, exercise readiness, and monitor for relevant cyber security developments.
Closer to home, the South China Sea and China’s increasing influence in the Pacific continues to cause fractures in the relationship between China and the United States.
Just prior to the Beijing Winter Olympics in a joint statement, President Xi Jinping and Russian President Vladimir Putin denounced interference from the United States in their affairs and opposed further enlargement of Nato.
While New Zealand has so far managed to carefully navigate its relationship with China, we will face increased pressure as Australia, the United States and the UK make stronger statements about China’s behaviour. At last year’s Apec CEO Summit, President Xi warned Asia-Pacific nations to not “relapse into the confrontation and division of the Cold War-era”.
Prime Minister Jacinda Ardern noted at last year’s China Business Summit that differences between NZ and China were “becoming harder to reconcile” as Beijing’s role in the world grows and changes, and that “managing the relationship is not always going to be easy and there can be no guarantees”.
With geopolitics entering a new era, businesses must walk a geopolitical tightrope and be ready to respond as events occurring elsewhere in the world impact their own operations, relationships, and people.
Since the start of the pandemic, the “Great Resignation” has gained momentum. The pandemic has shifted the mindset of employees, and seen them leave their jobs in search for a better work-life balance, remote work opportunities, increased flexibility or higher pay. In some cases they are moving to organisations that provide a better sense of purpose and meaning, with values that align with their own.
In order to remain competitive and attract and retain workers, companies have to rethink the benefits they offer and clearly articulate their purpose.
This is particularly true for knowledge sectors — those industries significantly reliant on the use of technology and human capital. The tight labour market around the world has seen those workplaces that don’t offer the flexibility and purpose demanded by their employees hindered by increased turnover in a market where good talent is hard to find.
But remote and hybrid has introduced new challenges for business.
The removal of a commute dramatically increases the pool of potential companies for employees. Someone living in Taranaki can now apply for remote working roles in Wellington or Auckland that might have previously been unobtainable to them.
It also limits the social ties that employees make with colleagues.
We have all been to staff farewells where we are told by the departing employee “it is the people here that makes it so hard to leave this job”. These connections that might have once encouraged employees to remain in their job have become weaker and will see the great resignation becoming a sustained challenge for business to grapple with.
As an alternative to negotiating remuneration with employees and becoming drawn into a bidding war with other workplaces, there has been a rise in companies offering a shorter work week as a bargaining chip.
One example of reduced hours is the four-day work week, which is gaining momentum around the world.
NZ’s Perpetual Guardian trialled a four-day week in 2018 — a world-first for a privately held company.
The eight-week experiment measured productivity, motivation and output, with staff paid the same amount for working fewer hours. It discovered productivity improved 20 per cent, and employees were more creative, committed and less stressed. It has since made the move permanent.
Perpetual Guardian founder Andrew Barnes says the four-day working week is “not just having a day off a week — it’s about delivering productivity, and meeting customer service standards, meeting personal and team business goals and objectives”.
More companies are now beginning to trial shorter work weeks.
A four-day week pilot in the United Kingdom begins in June, with 30 companies signed up so far. The pilot is run by 4 Day Week Global, an organisation that advocates for the shorter week. It says similar programmes are set to start in the US and Ireland, with more planned for Canada, Australia and New Zealand.
Covid-19 has put significant strain on the workforce. Uncertainty around job security, lockdowns, social isolation and limited social contact all contributed to the mental health crisis and exacerbated stress, anxiety and depression for both employers and employees.
The challenge of retaining good employees has seen businesses and business leaders prioritise health and build a culture of wellbeing in the workplace that openly supports mental health.
Many organisations have introduced wellbeing programmes, which include partnerships with mental health providers, subscriptions to mental health apps, fitness classes and additional days off. Last year, Westpac New Zealand introduced five days a year of wellbeing leave, and NZX-listed Vista Group introduced half-day Fridays for all its staff.
Research conducted by the New Zealand Institute of Economic Research last year on behalf of Xero showed investing in employee wellbeing can help to make a business more profitable.
It estimated that for every dollar a small business invests in company-wide wellbeing initiatives for staff, it can expect to see a return of up to 12 times within a year.
Overlaying all these trends, Covid-19 remains present. While the world welcomed the news that the highly transmissible Omicron variant is associated with less severe disease than earlier variants, a pattern of new variants around every six months has emerged.
Since there is a risk of the virus mutating each time it reproduces, the greater transmissibility from Omicron brings with it an even greater chance of new variants emerging.
It was hoped by many that the vaccine rollout would bring an end to the pandemic, but it looks increasingly likely that Covid-19 — in one form or another — is here to stay.
New tools like antivirals, antibody treatments and new vaccines are coming on board this year, which will help us navigate Covid-19 as it becomes an endemic disease.
These will be important as 2022 (hopefully) becomes the year that businesses, employers, employees and government finally reach post-pandemic normality. In a year fraught with challenges of all kinds to navigate, that is something that should bring hope to us all.
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.
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.
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.”