Introduction

Welcome to our Snippets newsletter which as always endeavours to provide coverage of developments in energy and environmental issues, from both here in New Zealand and around the world. We hope you continue to find our fortnightly collection of articles to be of interest in what is a rapidly evolving area.

Ever wondered why businesses are all of a sudden accelerating their transition to sustainability? Increases in climate change induced disruption in supply chains, a likelihood of increasing regulatory oversight and pressure from investors are some reasons. Another, albeit less obvious, but one of increasing importance, is the desire and need to engage with Millennials, a rapidly growing consumer market and a source of talent for companies. Millennials are also more environmentally and socially conscious than older generations, and if businesses want to cash in on their rising purchasing power or retain young talented workers, they have to speak with purpose to the Millennials. Quite simply, this generation doesn’t want to work for a system that doesn’t work for them. ^[1]

So, let’s examine just how businesses can adapt to the new opportunities presented by this new era of sustainability. Not every business is reacting, but those that are see it as a non-negotiable part of their organisation’s DNA, anchored in societal purpose, and previously frustrated CEOs now see sustainability as a mandate to solve societal challenges and a core element of competitive advantage. A full 59% are now able to accurately quantify sustainability’s value to their business. ^[2]

Companies are also responding to shareholder calls to be more responsible. Operational excellence is synonymous with sustainability and a sustainable business is an efficient one. Major retailers and industrials, including Walmart, Westpac, General Electric, Patagonia and Dow Chemical, are all aggressively pursuing sustainability and it is proving to be economically lucrative. According to Corporate Social Responsibility Newswire, $1 of every $6 invested incorporates sustainability, or a total of $6.5 trillion.^[3]

Furthermore, data from the world’s largest 500 companies, representing 28% of the world’s GDP, indicates they are decoupling emissions from business growth. Not every company in this top 500 is actively driving down emissions, but it is a promising sign.^[4] Much of these efficiencies are likely to be being driven by leaner processes and the use of smart technology. It is estimated that there is a further $2.1 trillion of revenue available in the ICT sector contributing towards Sustainable Development Goals (SDGs) achievement, including $400 billion per year from connecting an additional 2.5 billion people to communication services, and $1.7 trillion from digital technology, including eCommerce ($580 billion), eWork ($537 billion), smart buildings ($200 billion), eGovernment ($86 billion), and online learning ($75 billion).^[5]

The recently agreed UN SDGs provide businesses with a clear and unified framework that supports the design and structure of sustainability practices and initiatives. Businesses have been identified as the single most important driver for the delivery of the SDGs, with 70% of CEO’s seeing them as a clear framework for businesses to structure sustainability efforts. ^[6]

"Around the world, more and more people understand that climate resilience supports progress," added U.N. General Secretary Ban Ki-moon, as he implored the private sector to stand up and take notice of the SDGs. "Trillions of dollars will be invested in infrastructure in the coming years," he added, reminding the audience that many of those dollars will — or at least should — be deployed in accordance with the SDGs. ^[7]

Not just businesses, but local governments and councils also want to do their part in combating climate change. In Australia they are frustrated by the lack of action by the federal government and are taking action into their own hands, without federal support. Local councils are setting their own zero emissions and 100% renewables targets in an effort to fill the national void. However, many are still struggling with both financial and legislative barriers trying to achieve them, but can see the business opportunities embedded in these targets, more so than federal government appears to.^[8]

Barriers also exist to other areas of environmental protection, including protection of our oceans. There is a lack of a comprehensive regulatory framework for the oceans, and the UNCLOS (United Nations Convention on the law of the Sea) framework is not enough. The barriers that ocean conservationists face trying to protect our oceans are numerous. With regulations that do exist being mostly voluntary, conservationists are having a hard time trying to save our ocean life. Using examples, such as the Sargasso Sea, the article gives an eye opening account of the hoops that need to be jumped through to protect sea life. ^[9]

But there is some good news. As mentioned above, most regulation by countries is voluntary, and the next article speaks of Palau, an island nation, aware of the issues of over fishing, seeking to remedy these mistakes. Palau is not only launching initiatives to try to reduce bycatch in the tuna fishery, but is looking to create a vast marine reserve banning fishing and undersea mining in 80% on their oceans. The nation is small, only 21,000 people, but is leading the way towards marine protection for the rest of Pacifica nations. ^[10]

Regulations and targets are not always enough to ensure compliance and environmental protection. Luckily, with evolving technology, it is becoming easier to monitor. Our next article follows two linked organisations and how, through satellite technology, they were found to be in violation of their claims to be producing sustainably. Satellite imagery was used to prosecute palm oil manufacturer Plantaciones de Pucalla and cacao producers United Cacao for deforestation, and were told to cease production by Peruvian government. This increase in transparency may help find more organisations that are playing the system, and hopefully convince others to practice sustainable business methods.^[11]

Now for a couple of stand-alone articles. First we once again look to China. This time there seems to be a problem with their removing too much underground water, which is causing areas of Beijing to sink, in places up to 11cm per year! And it is not only Beijing, but cities across China. Depletion of groundwater causes subsidence, accelerated by the construction of heavy buildings above. Other cities or countries may need to take note. ^[12]

And on a more optimistic note to end this week’s newsletter, Elon Musk and Tesla are attempting to create the first “vertically integrated” energy company, which will supply not only electric cars and batteries, but by teaming with “SolarCity” they will be able to also provide renewable solar power panels and batteries for storage, and financing and installation services – a one-stop shop for all your energy requirements. Strategically a good move, as making life easy for the customer makes complete sense. ^[13]

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.