US Business Summit 2023: Summit close
Tim McCready, Summit MC closes the 2023 US Business Summit. — United States Business Summit 2023 30 November 2023 at Cordis, Auckland. Brought to you by NZ INC. and Auckland Business Chamber.
US Business Summit 2023: Summit Summary
SUMMIT SUMMARY
Summit co-chairs Fran O’Sullivan and Simon Bridges summarise the United States Business Summit with Summit MC Tim McCready.
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United States Business Summit 2023 30 November 2023 at Cordis, Auckland. Brought to you by NZ INC. and Auckland Business Chamber.
Sustainability: Is it at risk of becoming a fair-weather friend?
Sustainability: Is it at risk of becoming a fair-weather friend?
It was only 10 months ago that New Zealand suffered two of its most costly weather-related disasters.
The Auckland Anniversary floods and Cyclone Gabrielle resulted in insurance claims of more than $2 billion. Climate change was a top concern of the nation. Ipsos’ New Zealand Issues Monitor ranked it the fifth-most-significant concern for New Zealanders in February and May 2023.
But you just have to look to the recent election to see how much has changed since then.
Climate change was barely mentioned on the campaign trail or during the debates by the two candidates vying to be Prime Minister.
By August, the Ipsos survey saw climate change slip out of the top five concerns for New Zealanders and making way for worries about the cost of living, crime, housing, healthcare and the economy.
This is a trend seen globally, where soaring inflation and the cost-of-living crisis has seen consumers shift to cheaper and often less-sustainable products and services, and their attention shift away from the climate.
EY’s Future Consumer Index, which surveyed 21,000 consumers across 27 countries, found that affordability was the top priority at 35 per cent (up from 25 per cent in October 2022). Of the five consumer segments, “planet first” saw the biggest decrease, falling from 25 per cent in 2022 to 16 per cent this year.
With more immediate challenges pushing climate action further down the priority list, it is at risk of becoming a fair-weather friend. The irony of that is noted.
Other trends making impacting sustainability efforts include:
Anti-ESG: a true movement or simply politics?
Criticism of sustainable and environmental, social and governance (ESG) investing has gained momentum recently, particularly in the United States as it has become increasingly politicised.
Simultaneously, there has been a notable increase in the amount of “anti-ESG” funds, defined as those that invest in assets that were traditionally excluded by socially responsible funds and often aligned with politically conservative values.
Flows into anti-ESG funds peaked in the third quarter of 2022, according to American financial services firm MorningStar. More than 80 per cent of the US$377 million ($630m) raised that quarter flowed into the first fund of Strive Asset Management – an investment firm founded by Republican presidential candidate and pharmaceutical entrepreneur Vivek Ramaswamy to counter the “woke” investment practices of more established ESG-focused firms like BlackRock.
In his campaign launch video, Ramaswamy criticised “the woke left” and its focus on diversity, denouncing policies from left-leaning politicians used to address the Covid-19 pandemic, gender issues and climate change.
Another Republican presidential candidate, Florida Governor Ron DeSantis, also took aim against ESG investing this year, signing a law that prohibits the state’s public or state-controlled funds to invest based on ESG factors. The anti-ESG legislation is set to be a model for other Republican-led states, prioritising financial returns for state funds and state pensions and preventing the issuance of green bonds.
Even BlackRock CEO Larry Fink, a longtime proponent of investing with ESG standards in mind, said in June that while he hasn’t changed his position on ESG, he has stopped using the acronym following its weaponisation by the far left and the far right of politics.
More recent data from MorningStar reveals that anti-ESG funds have fallen dramatically from last year’s peak. The firm suggested in its headline that “anti-ESG might be over before it even got going”. It is also worth recognising that the surge of investment into anti-ESG remains miniscule compared to the vast pool of ESG assets.
Bloomberg Intelligence estimates these will reach US$50 trillion ($83.5t) in 2025.
Without a doubt, the question over whether anti-ESG is a genuine shift in investment philosophies or merely a reflection of political discourse will linger. The US presidential election is set down for November 5 next year.
Greenhushing: is silence the new strategy?
Most of us are familiar with greenwashing, where companies and brands exaggerate or even fabricate their commitment to sustainability and eco-friendly practices without substantiating their claims.
It has become a growing concern as consumers and investors increasingly seek genuinely environmentally responsible options.
In response, it has given rise to a contrasting phenomenon: greenhushing. In this case, businesses make a deliberate choice to downplay or even hide their sustainability initiatives and credentials.
One reason for this is the ongoing political hostility over climate change. Advocates for stronger environmental action are pushing for even further efforts, and those with opposing views are boycotting firms for even acknowledging climate change should be factored into business decisions.
Meanwhile, some firms are greenhushing as a protective measure against scrutiny. The heightened emphasis on verification and transparency means that loudly announcing sustainability efforts invites increased attention and the possibility of criticism.
With governments and regulatory bodies cracking down on greenwashing and demanding companies substantiate the claims they make, there is a growing number of businesses staying quiet about their efforts as a prudent course of action amid the risk of a potential lawsuit.
While other companies choose to under-report their sustainability efforts to avoid being asked for ever-expanding amounts of data and the associated expense associated with verification.
Greenhushing can be seen rippling through sustainable funds as well. US-based fintech consultancy Broadridge identified 44 sustainable funds that dropped the word “sustainable” from their fund in the first half of 2023, contrasting with 2022, when 99 funds added the word to their name.
This is linked to the European Securities and Markets Authority signalling that greenwashing has become a major concern for policymakers and it may move to regulate the use of firms using ESG or sustainability-related terms to avoid funds obtaining an unfair competitive advantage.
Artificial intelligence: a climate hero or enemy?
No discussion of current trends impacting business would be complete without the mention of artificial intelligence (AI).
It has quickly emerged as a powerful tool for myriad industries seeking to adapt and mitigate the impacts of climate change and accelerate the transition to a more sustainable and resilient future.
AI-informed precision agriculture can help to optimise resource use, reduce waste, and enhance crop yields. The energy sector is being made more sustainable with AI forecasting for renewable energy sources, grid optimisation and demand-side management. AI-powered logistics and traffic management can help reduce transport emissions and improve fuel efficiency.
In the construction and real estate industry, AI can track the use of a building and use historical patterns to adjust lighting and air conditioning. It can help to identify when it makes economic and climate sense to make upgrades to buildings.
However, there is an often-overlooked counterpoint: these technologies also contribute significantly to greenhouse gas emissions. Data centres rival the aviation industry in their carbon footprint and consume significant amounts of water.
As technological developments progress, the demand for energy to continue to train and operate these systems is only set to increase. As AI becomes more deeply ingrained in the world around us, finding sustainable energy solutions to power it will be an increasing challenge. But never fear: AI will undoubtedly help us solve it.
Sustainable Business and Finance: An enduring local partnership
Sustainable Business and Finance: An enduring local partnership
ICBC NZ acted as lead arranger and joint sustainability co-ordinator for Wellington City Council’s new facility at Moa Point.
ICBC NZ is deeply focused on long-term growth through infrastructure development and committed to being a cornerstone partner in New Zealand’s progress towards its emission reduction targets.
Kevin Xu, deputy head of corporate & institutional banking of ICBC NZ, says that by providing funding in utilities, ports, highways, airports and the energy sector, the bank envisions an enduring relationship with the local economy, firmly grounded in sustainable financial practices.
This aligns with the bank’s commitment to environmental sustainability and the pivotal role of infrastructure in shaping a greener, more efficient world.
This year marks the 10th anniversary of ICBC operating in New Zealand as a fully owned subsidiary of the Industrial and Commercial Bank of China, the world’s largest bank by total assets.
Since its establishment in 2013, ICBC NZ has been involved in several major infrastructure projects, including the Hobsonville Point Schools public-private partnership, supporting Tainui Group Holdings (the commercial arm of the Waikato-Tainui iwi) through a banking syndication to support the development of the Ruakura Superhub, and participating in Napier Port’s capital investment programme.
ICBC NZ also acted as mandated lead arranger and joint sustainability co-ordinator for the $400m funding package for Wellington City Council’s new sludge minimisation facility.
The facility will be adjacent to the existing wastewater treatment plant at Moa Point and will use chemical and mechanical processes to handle and dispose of wastewater sludge. It is expected to provide significant environmental benefits through an 80 per cent reduction in the volumes of solid waste sent to landfill by 2026 and up to 60 per cent reduction in emissions.
The transaction, supporting the sponsor, Crown Infrastructure Partners, is the second application of the funding tools created under the Infrastructure Funding and Financing Act 2020 and the first to utilise a contractual structure that efficiently accommodates both fixed rate and floating rate lenders.
ICBC NZ recognises that funding sustainable projects like these require a long-term commitment and innovative funding models, and it is keen to see more opportunities arise in New Zealand it can be part of.
“As part of our efforts to be a long-term bank here, we are continuing to build our capacity, our team, and our infrastructure here,” says Xu.
“We want to be involved in more opportunities — areas like renewable energy, including solar farms, offer exciting potential.”
Due to its significant international operations, the bank can leverage its global network and share relevant expertise and funding models that have been successful in China and elsewhere around the world to make projects financially viable and appealing for investors in the long run.
“Building sustainable infrastructure typically necessitates both additional operational expenditure [Opex] and substantial capital expenditure [Capex],” says Xu.
ICBC NZ is committed to providing the financial backing necessary to support this critical investment.”
Xu emphasises ICBC NZ’s commitment to encouraging sustainability within its clientele, pointing to the bank’s support in helping corporates transition their conventional loans into sustainability-linked loans with science-based, ambitious targets.
He says for ICBC NZ, sustainable finance extends beyond financial transactions.
It encompasses a commitment to encourage corporate clients to develop their own sustainability operating frameworks. This approach not only ensures sustainable business practices, but also allows clients to pass on the benefits of sustainability to their own stakeholders.
Looking beyond direct environmental sustainability, ICBC NZ is also keen to support people-related businesses, such as schools and aged care facilities.
“These are all areas of infrastructure that will provide fundamental support to New Zealand and ultimately help its economy,” says Xu.
A decade on from its establishment in NZ, ICBC says it will continue to be a bridge that facilitates trade and investment between NZ and China.
“By supporting local businesses exporting to China and aiding Chinese businesses and investors interested in New Zealand, ICBC is able to accelerate international partnerships that contribute to sustainable economic growth and cultural exchange, while providing the much-needed impetus to deliver a greener future,” says Xu.
Taumata Rau Conversation pushes cybersecurity up the agenda (University of Auckland)
Cybersecurity concerns aired in a Taumata Rau Conversation add to the discussion New Zealand needs on national security issues.
Two years ago, the Royal Commission of Inquiry into a terrorist attack in Christchurch challenged the government to build a conversation with New Zealanders about national security challenges.
An expert discussion on cybersecurity at the University on 24 October was a contribution to that goal. “We need the sorts of conversations that we’re having now,” Tony Lynch, a top national security official, told the audience.
Fellow panellists in the Taumata Rau Conversation, hosted by Vice-Chancellor Professor Dawn Freshwater, were:
- Professor Giovanni Russello, the head of the University’s School of Computer Science
- Lisa Fong, deputy director-general, National Cyber Security Centre
- Amber McEwen, the chief executive officer of Research Education Advanced Network New Zealand, which runs a data network for researchers and educators collaborating across New Zealand and the world.
The background included cyber-attacks which have targeted nationally significant organisations including Parliament and universities. A ransomware assault crippled the Waikato District Health Board in 2021 and last month electronic ticketing for Auckland public transport was similarly taken out of action.
Lynch, the head of the National Security Group in the Department of the Prime Minister and Cabinet, walked the audience through the nation’s first national security strategy Secure Together – Tō Tātou Korowai Manaaki, issued in August by the Ministry of Defence.
Malicious state and non-state actors are a persistent cyber threat to all New Zealanders,
How far do we lock down New Zealand and stop that free flow of information? You can go too far and then you end up with the Great New Zealand Firewall.
Individuals and private organisations are key in fending off the assaults since the bulk of cybersecurity capability and effort lies outside of the government.
Asked about his biggest concerns, Lynch highlighted the increasing interconnectedness of critical infrastructure, as powerfully demonstrated in Hawke’s Bay during Cyclone Gabrielle when electricity and communications failed after the flooding of a power station, impeding emergency responders and cutting services such as EFTPOS and ATMs.
Critical infrastructure needs more of a “system” approach, sharing information across sectors, he said. Likewise, Fong was focused on vulnerabilities from the intertwining of physical and digital infrastructure and reliance on the global digital supply chain.
In Russello’s view, New Zealand is “not where we should be” on cybersecurity for reasons including a lack of investment, a shortage of cybersecurity specialists, including in academia, and businesses treating digital security as a late-stage add-on.
Burnout of cybersecurity workers was a topic and moderator Tim McCready prompted a discussion about the potential for minimum standards and mandatory reporting.
Issues with critical infrastructure seemed to support a regulatory move in that direction, away from New Zealand’s traditional principles-based approach, according to Lynch. However, Fong cautioned there were no “silver bullets.”
The audience learned from McEwen of issues facing a digital network linking our scientists to the world.
The Research Education Advanced Network New Zealand, which she heads, is a Crown-owned company operating a network which lets researchers collaborate on data-intensive projects and is used by entities including universities and Crown Research Institutes.
In instances such as Russia’s invasion of Ukraine or the Taliban’s grab for power in Afghanistan, should the global community of research and education networks cut off those nations’ scientists and researchers?
“That’s been the big debate for us,” said McEwen. “We’ve come to the point where we keep collaboration going but we pull off research programmes where necessary.”
Risks from interconnected infrastructure were demonstrated in Hawke’s Bay during Cyclone Gabrielle when electricity and communications failed along with services such as EFTPOS and ATMs.
In Europe, Russian scientists were cut off from the Large Hadron Collider, the world’s most powerful particle accelerator, because research could be weaponised, she said.
Another conversation in McEwen’s world is the balance between security and information flow.
“How far do we lock down New Zealand and stop that free flow of information?” asked McEwen. “You can go too far and then you end up with the Great New Zealand Firewall.”
Taumata Rau Conversations will continue into 2024. The series aims to spark meaningful discussions from multiple perspectives on the major issues confronting Aotearoa New Zealand.
The cybersecurity event was the second in the series, following a discussion of the future of the health workforce.
Political commentary: National Party Leader Christopher Luxon (Country TV)
In the lead-up to the 2023 election, this 10-part political series hosted by Mark Leishman shines the spotlight on the big issues facing rural communities around New Zealand. Tim McCready provides commentary for today’s guest, the National Party leader Christopher Luxon.
Political commentary: National Party’s Todd McClay (Country TV)
In the lead-up to the 2023 election, this 10-part political series hosted by Mark Leishman shines the spotlight on the big issues facing rural communities around New Zealand. Tim McCready provides commentary for today’s guest, the National Party’s Todd McClay.
The wrapup: A chat with journalist Jonathan Milne, who invited candidates to knock on his door (Onehunga FM)
In this episode managing editor for Newsroom Pro Jonathan Milne and host Tim McCready discuss the candidates standing in the Maungakiekie electorate.
Launching from Jonathan’s recent write up for newsroom, Tim and Jonathan unpack the developments in the campaign and how candidates have fared in addressing various issues like crime, cost of living, and climate change.
At end of the podcast Jonathan’s daughter Cleo joins Tim on the podcast to share her perspective as a young person on politics, the voting age, and what she appreciates about living in Onehunga.
Political commentary: Green Party’s Teanau Tuiono (Country TV)
In the lead-up to the 2023 election, this 10-part political series hosted by Mark Leishman shines the spotlight on the big issues facing rural communities around New Zealand. Tim McCready provides commentary for today’s guest, the Green Party’s Teanau Tuiono.
Political commentary: NZ First’s Shane Jones (Country TV)
In the lead-up to the 2023 election, this 10-part political series hosted by Mark Leishman shines the spotlight on the big issues facing rural communities around New Zealand. Tim McCready provides commentary for today’s guest, NZ First’s Shane Jones.