By George Hulbert
On our travels into the world of social outcomes, Scott Jacobs and I meet people every now and then who take the view that it might not be necessary to take action to deliver on the social and environmental aspects of the NZ Government’s wellbeing agenda. Reasons we’re given vary from ‘we already have a CSR plan’ to ‘it’s just a new government-mandated cost’, or ‘it’s a passing fad’.
While it is undoubtedly true that this is an agenda currently mandated by a second-term Labour-led government, and it is extremely rare for any one party to last past a third term in the driving seat, we see this agenda not only lasting but strengthening into the future.
We know - and regularly see - significant reasons out there why your organisation should take action now to improve the outcomes you generate. So here you go: 4 reasons why we are firmly believe that you need to take action now to deliver more than just a good job; to go further and deliver what we call Net Positive Impact:
1. If you want to win government work you need to do it – or get left behind
Politicians aside, the many procurement teams within the massed ranks of the public service, state services, government departments, autonomous and independent crown entities and agencies have all got the social procurement bit between their teeth. The social, economic, environmental and cultural dimensions of the Broader Outcomes are woven throughout their RFPs with varying degrees of emphasis depending on each agency. However, the need to drive Public Value through doing more than just a good job is now an entry-level requirement if you want to win some of the $42bn procured work on offer annually.
Because this is now well embedded among the bureaucracy, tenderers need to do more than just a good job in your work. You need to show how you’re going to leave a legacy of improved skills and social outcomes as you do your work. It’s as much about how you do things as what you do. And it’s all about structure, proof and measurement.
In turn, this means that you can’t put this in place at tender time. When RFPs land on your desk it is often too late to do anything about it. You need get going beforehand, so you have evidence of the structure you’re applying, and examples to prove it is alive and well in your organisation.
And, with weightings in this area ranging from 5% all the way up to 20% in RFPs, we believe you dismiss this emphasis at your own risk.
FOMO? It’s up to you.
2. It’s increasingly a focus for commercial clients too
It’s not just government organisations that are looking for suppliers to act to generate positive social and environmental outcomes. Increasingly we are seeing corporates pick up the mantle, detailing the way they want to operate, the legacies they want to leave, and approach they expect their suppliers to take as they work to do better, attract stronger tenants and customers and contribute more systemically to NZ Inc.
From many, many organisations that are active in this area, we select three exemplars to prove the point:
Goodman Property Trust has integrated three core sustainability principles into its business strategy and values: sustainable properties, people and culture, and corporate performance. See their sustainability approach here:
Auckland Airport: Community, people, purpose and place – four themes linked to action and aspiration driving the airport onwards.
Westpac: Care for the planet and people, and grow financial wellbeing; themes with specific targets and actions attached.
All three organisations see the opportunity that exists to do more and better business through putting these strategies at the heart of the decision-making. So, if you wish to be part of the orbit and supply chain of these organisations – and many more – you need to consider how your organisation can tell a provable story about how you will help them move forward in these areas.
One more point in this area: we’re seeing more questions being asked about the approach and behaviour of supply chains. If you’re part of a supply chain that contributes to the success of your client, the chances are you will be asked to prove what you’re doing in these areas if you want to work with them…
3. It’s a global thing, guys
Did you read the latest UN IPCC report that came out recently? What could be the most important document published this year on Planet Earth paints a depressing picture of mankind’s failure to date to address climate change, and the likely consequences of further inaction:
‘Global surface temperature will continue to increase until at least the mid-century under all emissions scenarios considered. Global warming of 1.5°C and 2°C will be exceeded during the 21st century unless deep reductions in carbon dioxide (CO2) and other greenhouse gas emissions occur in the coming decades.’
In that context, what future New Zealand government - of any hue - is going to deviate from a Carbon Zero 2050 in any way other than to sharpen our trajectory? 2040?
It’s also worth considering that as the low-hanging fruit of change is plucked early on, the spotlight will intensify onto more organisations, of all sizes and activities. As returns diminish over time, we will all be asked to do more. The flipside to this is that access to capital is also likely to become ever-more dependent on environmental, social and governance (ESG) credentials. Expect a further post on this another time.
4. Taking action is proven to add value to your organisation
Soar Print is a phenomenal example of a business that chose to focus more on the value opportunity than on the cost of making change.
As an SME that has shown double-digit growth since 2009 in a so-called sunset industry by putting sustainability at the heart of its strategy, Soar has won work and flourished as others around it fall by the wayside.
This fantastic company shows that taking net positive impact action is not just for big corporates. Soar shows that it is absolutely possible for Kiwi companies of all sizes to put sustainability at the heart of strategy, set ambitious environmental goals (in Soar’s case: to go further than the national 1.5 degree reduction goal) and then measure progress along the way.
Net result: awards won by the bucket-load; a series of major contracts won to supply to organisations that can see how Soar will help them progress; and a team engaged and enthused by the journey.
If you still don’t believe that there’s value in them-there sustainability hills, then maybe you might take the word of McKinsey instead:
What McKinsey has successfully shown is that a world-class ESG journey is possible for any organisation that is willing to take action:
Source: McKinsey
And don’t forget what your grandmother might have told you. Mine certainly said this to me: “Actions speak louder than words.”
So get out there and do it. You'll be a winner if you do so.
If you’d like some help to align, adapt and achieve in this area, do get in touch with us.