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 examine the value of sustainability and despite the gains for an organisation through reduced risks, lower costs, sustainability-driven market opportunities and top-line growth, or intangible benefits such as greater customer loyalty, higher brand value, or improved ability to recruit and retain top-notch employees, how it is struggling to translate into improved stock market results.

It appears the main reason stock brokers remain unimpressed is the lack of robust financial metrics. There is therefore a need for new metrics that are meaningful from an investor perspective rather than from an environmentalist point of view. Whilst there are plenty of sustainability metrics available, there is little clarity on what is important or “material” and even less information on how the data being reported might translate into shareholder value.

With this need in mind, we review the Grant Thornton International Business Report 2014 and how investors are calling for increases in transparency and a shift to integrated reporting. The key drivers in moving towards environmentally and socially business practices are now Cost Management at 67%, followed by Customer Demand at 64% and ‘Right Thing To Do’ at 62%. We couldn’t help but notice New Zealand is regarded as a laggard when it comes to sustainability reporting (only 16%) compared to those from India at 68% and Netherlands at 64%.

In our next series of articles we look at ‘A new age in electrification’. Low carbon electricity is a prerequisite to reducing fossil fuel use, and mitigating CO2 emissions, across all business sectors.

A leading investment bank, UBS, says the payback for unsubsidised investment in electric vehicles, roof top solar and battery storage will be as low as 6-8 years by 2020. This will cause a massive revolution in the energy industry.This revolution could well change Europe’s and other nations need for any new power plants notes UBS. If the investment and take up of alterative power sources, such as solar, gain a firm footing at the factory, corporate or private level, the need for more power stations may be negated by this ‘on site’ energy generation and use.

How will these changes affect local communities? In our next article we look at communities going into the electricity business to cut costs and carbon footprints. Although the article focuses on American communities, we can see the appeal of a community making like-minded positive choices when it comes to their electricity requirements. If successful, we can certainly see large energy providers looking at changes to the way they do business.

How is New Zealand fairing in the low carbon and sustainable energy revolution? Well, NZ has always had a high renewable energy focus. Reliance on Hydroelectricity has meant that at one time this comprised around 70% of NZ’s power. This has now dropped to 53%, with 19 wind farms now in the mix, along with geothermal energy contributing more. Will the trend of different energy generation continue? It’s hard to say, with a flat energy demand, these types of projects may be the last new ones for the time being.

Although NZ has a good mix of renewables, there is a problem with increasing emissions (fifth highest emissions per head among 41 developed economies). How to decrease your carbon emissions when you have a heavy reliance of agriculture (dairy farming) is a tough question that probably no one has a clear answer to!

In our next article we take a look across the Tasman, where government legislation to revise the Renewable Energy Target ( RET) is potentially delaying the march towards renewable energy generation. As with anything, there are always winners and losers, and in this case the fossil fuel industry will be the big winner. The losers will be the industries that create, install and service equipment such as solar arrays etc (currently atop 1.3 million roofs there). Is this the right approach for Australia to take?   We don’t think so. Neither do many Australians.

A government changing the ‘rules’ does impact on possibly better options, as Australia is experiencing, but what if a supposed renewable energy is really not that renewable. In March 2007, the E.U. adopted climate and energy goals through to 2020. Unfortunately, they underestimated the carbon intensity of an industry burning wood (a.k.a. “biomass”) for electricity, and they categorized wood as a renewable fuel. So initially, on paper, it ‘looked’ good, but as the article explains it hasn’t necessarily worked out as originally envisaged.

A renewable energy that we can see a great deal of potential for, is the Nanoflowcell. Forget the current price tag of $1.7 million, and the exotically designed vehicle it is being trialled in, and think of the potential for this system to power other vehicles, and also medium sized stationary plant, using ultracapacitors and special flow batteries. The energy potential stored in the "salt water" is sure to be disruptive.

Our next three articles look at aspects of buildings that can affect the occupants alertness and levels of concentration, and their productivity.

If you find you are not getting enough sleep, have you recently changed your lighting? If so, you may want to assess the type of lighting you are exposed to while preparing for sleep. Or if your business is providing accommodation, your lighting could be a “point of difference” that enables your guests to choose you over a competitor, for a better nights sleep.

Does your workplace have natural light? A recent study has shown that workers, whose work environment has windows providing natural light, are more productive, sleep better and are more physically active than those with no access to natural light in their workplace. Another study shows a way of increasing productivity and concentration in the workspace is to have it landscaped with plants. Here at ETSL we have lots of windows, plants and natural light! Lucky us.

Thanks for taking the time to read this issue and we look forward to catching up with you again. If you have any items of interest you would like to submit, then please feel free to forward them.