Tech sector aims high in sustainable digital transformation

A new research report analysing the sustainability work, attitudes, and efforts of businesses in six major sectors shows a business community trying to do its best but needs more guidance to convert will to action. 

Though 96 percent of businesses surveyed have noticed the benefits of adopting sustainable solutions, less than a third of companies can benchmark their sustainability performance against other comparable organisations.

Global energy and automation digital solutions provider Schneider Electric produced the New Zealand Business Sustainability Research Index with Perceptive, which interviewed 300 New Zealand business decision-makers in operations, finance, technology, and sustainability in organisations ranging from two to over 100 employees. Leaders were canvassed in the retail, construction, telecommunications and technology, manufacturing, professional services, and electricity, gas, and water services sectors.

A few key barriers were identified among some of New Zealand's top business decision-makers. Close to one-third (32 percent) say the most significant barrier to adopting sustainability solutions within their organisation is a need for government incentives for sustainable technology adoption. Even though exactly half of the businesses surveyed are required to report on sustainability in their business plans or stakeholder reporting among those with 50 or more employees, that figure is 58 percent. 

There is also considerable variation in reporting across industries, with just 42 percent of construction businesses being required to report on sustainability, one of the lowest rates across all industries surveyed.

Of those surveyed, the small to medium businesses (two to 49 employees) have the lowest uptake and sense of urgency to adopt sustainability solutions and the lowest agreement (51 percent) that their business is on track to meet its sustainability targets. However, among companies with 50 to 99 employees there is 76 percent agreement, and those with 100+ employees have 81 percent agreement.

Business leaders on the frontlines of change confirm that a significant barrier is a need for comparative data. 

Vinit Mahna, Finance Manager for Spark, says, "Benchmarking is a problem. There are no benchmarks or means of comparison, so it's hard to track progress." 

And the Vineyard Manager at a large corporate wine company says, "We don't have a baseline that we are comparing ourselves against. Another sustainability barrier is people; changing their mindsets. It is now part of performance reviews."

A large logistics company in Auckland notes that their organisation's goals are specific, including zero waste into landfill by 2040, but better communication is needed. "It would be nice to hear about what other organisations are doing in the news in terms of sustainability initiatives. Some of the initiatives in the UK far supersede what's happening here."

Mumin Bhat, the National Business Development Manager for Ecostruxure Power at Schneider Electric, notes, "The research identifies benchmarking as a common hurdle, and the main sustainability benchmark systems of Green Star Rating and NABERS NZ have high awareness among businesses, but unfortunately the accessibility isn't there yet. Businesses perceive the barrier to entry as too high, and they get scared away before starting."

"But, there is an easy way to make a start – what all businesses can do now is look at incorporating power and energy meters with software for power monitoring and energy management. What this does, is it allows a business to have an instant view of where the major energy loads are and where they can create immediate efficiencies and direct investment into the right areas." 

"When it comes to incentivising and implementing change towards sustainability objectives, business leaders can't just want to do it for ROI. They have to do it for their own morals and conscience, but this is harder when businesses are struggling to measure ROI against sustainability metrics. A monitoring system gives business leaders control."

Tim Burrows, CSQ and HSE Business Lead NZ at Schneider Electric, says the research reveals a problem, with a widespread understanding of the critical nature of sustainability initiatives but several hurdles around benchmarking performance and appropriate incentives. 

"The research paints a picture of the business community at crossroads. There is near-universal recognition of the need to tackle climate change, and clear KPIs and initiatives in place for most New Zealand businesses. However, when we look at the actions being taken, many businesses are not doing the basics. There is a large disconnect between how well businesses perceive they are doing versus what actions they are actually taking."

"The research finds large organisations tend to be further along on their decarbonisation journey thanks to additional disclosure requirements, increased shareholder and employee expectations, and access to greater resources and/or expertise to develop their sustainability targets and roadmap. There are a variety of different reporting measures seen, with the top two being general impact or CSR reports and data from business use. However, these levels are still relevantly low and reporting types do not appear to be advanced at this stage."

The research also identified some key distinctions relating to business size. 

Large and small businesses are more likely to say that a lack of government incentives prevents them from adopting sustainability technology. 

On the other hand, medium-sized businesses need more buy-in from employees and a lack of dedicated personnel and training to drive adoption internally. And these businesses are more likely to mention a need for more financial resources to invest in sustainable technology and a need to prove ROI to business stakeholders.