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Businesses frustrated at the lack of sustainability in the industry

A recent study has revealed New Zealand’s leading business leaders, from Spark to local vineyards, are frustrated at the low adoption rate of sustainability solutions across the entire industry.

Schneider Electric, the global energy and automation digital solutions provider are behind the New Zealand Business Sustainability Research, looking at sustainability work, attitudes and efforts of businesses.

Interviewing 300 business decision-makers across operations, finance, technology and more, the general finding of the research showed the industry is doing their best but lacks the guidance to convert will to action.

A key barrier many businesses face when it comes to adopting sustainability into their frameworks is the lack of comparative data with many companies, including a vineyard manager at a large corporate wine company saying there is “no true baseline that we are comparing ourselves against”.

“It would be nice to hear about what other organisations are doing in the news in terms of sustainability initiatives,” says a large logistics company in Auckland who had a goal of zero waste into landfill by 2040.

Mumin Bhat, the National Business Development Manager for Exostruxure Power at Schneider Electric says that benchmarking is a common hurdle but the systems to benchmark such as Green Star Rating and NABERS, are inaccessible.

Mumin Bhat.

Close to one-third, 32 percent, of businesses surveyed say the biggest barrier to adopting sustainability solutions is the lack of government incentives for sustainable technology adoption.

Out of all the industries surveyed, 42 percent of construction businesses are required to report on sustainability, the lowest rates across all industries surveyed.

Read more: The trend of climate innovation in New Zealand

With the industry seeing sustainability solutions as not urgent and least likely to implement within their businesses.

Small to medium business from two to 49 employees, have reported to have the lowest uptake and sense of urgency to adopt sustainability solutions.

However medium and large businesses have surveyed a larger uptake, with businesses with 50 to 99 employees have a 76 percent agreement and businesses with 100 plus have an 81 percent agreement.

Another finding from the research shows that medium-sized businesses struggle the most when it comes to sustainability with the lack of encouragement from employees and internal training.

They also tend to mention the lack of financial resources to invest in sustainable technology and the need to prove return on investment to stakeholders.

“When it comes to incentivising and implementing change towards sustainability objectives, business leaders can’t just want to do it for return on investment – they have to do it for their own morals and conscience, but this is harder when businesses are struggling to measure return on investment against sustainability metrics,” adds Bhat.

“A monitoring system gives business leaders control.”

Tim Burrows, CSQ & HSE Business Lead NZ at Schneider Electric says that looking at the industry as a whole, there is a widespread understanding of tackling climate change.

“But many businesses are not doing the basics,” he says.

“There is a large disconnect between how well businesses perceive they are doing versus what actions they are actually taking.”

He adds that through the research it is understood that large organisations are further along their decarbonisation journey thanks to the access they have to greater resources and expertise.

Looking at the industries, the retail sector surveyed 33 percent seeing benefit in setting sustainability targets despite them believing the lack of sustainability reporting on their business.

The retail industry finds the biggest barrier for adopting sustainability solutions is the reduced budgets because of Covid-19.

Professional services ranked the highest among sustainability reporting with 75 percent of businesses saying it is required.

In today’s environment, consumers are more cautious in their purchasing behaviour as they prioritise aspects such as sustainability, which in itself should be encouraging for businesses to take action and can expect more of in 2023.

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