Introduction

Welcome to another two weekly review of energy and environmental events and developments from both here in New Zealand and around the world. As always, we hope you find our collection of stories to be of interest in what continues to be a rapidly evolving area.

This week we focus on sustainability. What is it, which companies and cities might be implementing it, what are the barriers and what might the rewards be.

Before we do, we open with a message to world energy leaders from the South Korean President – Park Guen Hye that cooperation is needed to solve what is a three-pronged “energy trilemma”. She called on the world to find a trade-off between energy security, social equity and environmental impact mitigation. Park called for a revision of energy price frameworks, regulations to promote energy efficiency, and more investment in clean energy technologies. We couldn’t agree more.

Now on to sustainability, we open with a great article examining what sustainability might be from a business perspective. As it discusses, sustainability is more than being seen to be green and is a compass for a business to navigate to a clearer and robust business model. Sustainability is a fundamental rethinking of the definition and measurement of value, the opportunity to evaluate risks and find ways to enhance the role of key stakeholders drive efficiencies and get the best from your assets.

Ultimately, sustainability is an investment in reputation enhancement, risk management, customer retention, expenditure control and the identification of new market opportunities as well as the attraction of a lower cost of capital. It speaks of excellence in management and tone; therefore is a signal to the market, indeed, the outside world, of the organisation mind-set, culture and quality.

In that context, one would have thought all CEO’s would be embracing it and yet they are not. It turns out that many CEOs are really not that emboldened or motivated to act and instead are looking at government to show leadership (In other words, a cop-out). Until CEOs truly realise that with policy-makers in the clutches of big business, the only meaningful change will come when CEOs, their boards and investors, all come to the realisation that action on climate change and sustainability will lead to long-term success, and then use that realisation to lobby policy-makers to pass regulations reinforcing this.

And there is hope that this will occur sooner rather than later, as demands from investors and shareholders for companies to adopt sustainability reporting only continues to grow. As more investors and buyers factor sustainability data into their investment and procurement decisions, companies are increasingly leveraging sustainability reporting to gain a competitive advantage—an advantage company boards will need to consider going forward.

Some companies are at greater investor risk than others as the CDP Global 500 reveals, with just 10% of the largest companies being responsible for 73% of all GHG emissions.

We also examine examples of global companies such as IBM, Volkswagen, Sony, Samsung, Walt Disney and closer to home in BHP and Qantas leading in sustainability and what we might be able to learn from them.

It is not only confined to companies, but extends also to cities, with Singapore and Tokyo being held as amongst the ten best cities for urban sustainability. Also included in these top ten are New York City for adaptation & resilience, Munich for green energy, Copenhagen for carbon measurement & planning and Melbourne for energy efficient built environment.

Natural capital is getting more attention lately but what is it and how do you go about accounting for it? Natural Capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things. We have an article here that just might help explain it better.

It uses the sport giant PUMA as an example and go’s into detail on how to create an Environmental Profit and Loss Account.

Still having trouble with natural capital? Here is some software that may make things easier. A company ‘Climate Earth’  has recently released their Natural Capital Management System (NCMS). This is supposed to take some of the work out of reporting on your Natural Capital.

And if you have ever wondered if the NZ Super Fund might exclude companies from its investment portfolio, then the article about the Swedish Pension fund following suit might reassure us all that the pursuit of money isn't everything.

We wrap up this Snippets with a look at work a team at the University of Hawaii have been involved in. They have collated 39 climate models for the next century to find out in which year the temperature will exceed the limits of its historical precedents. This is when the average temperature of the coolest year exceeds the average temperature of the hottest year from the Industrial Revolution till 2005.

The study has found the Ocean has already exceeded its historical bounds in 2008! Around half of manmade CO2e is absorbed into the ocean and the tropics will be the first affected by climate change conditions. Tropical regions are where many crops grow and these changes will impact the cost of living elsewhere.

The speed at which climate change affects regions is going to vary, global steps need to be taken to slow this process down now so the impact is lessened. The net result is more time created to stabilize the changes currently being experienced.

Thank you for taking time to read our Snippets articles! The world is rapidly changing around us but with the new technology and business sustainability plans we are looking towards a bright, green future.