Russell Craig – CTO Microsoft New Zealand – Discusses with David Spratt at Total Utilities the cost and business case for Sustainability.
A recent Microsoft report on New Zealand’s sustainability performance shows that more than three quarters of NZ businesses now have carbon reduction plans and policies. But that’s where the green wave crashes into a wall – and uncertainty about costs is a major factor.
According to Microsoft’s ‘Accelerating the Journey to Net Zero’ report, two related reasons stand out as to why businesses are failing to meet their targets. One is that businesses are unsure how to monitor their emissions, giving them no clear baseline or way to chart their progress. The other is cost. But as Total Utilities Sustainability Director, David Spratt, argues in a recent Microsoft article outlining the report findings, you have to consider the cost to your business of not transforming and the opportunity to increase market share if you do. While the report found that only 43 percent of NZ organisations have the financial resources needed to execute their carbon reduction policies – that’s assuming they’ve made accurate calculations. It’s hard to make a clear business case and create a roadmap for change without the right facts and figures. There are also significant disparities between sectors when it comes to making these estimates.
Decarbonisation – cost vs value
David points out that businesses need to look past simple upfront investments as many calculations relating to sustainable ‘costs’ ignore the significant efficiency gains that can be made. He referenced a manufacturing customer of Total Utilities who was looking to purchase a new transformer worth $1 million. Yet by placing IoT sensors in its factories to measure the actual demand on the system, Total Utilities demonstrated that significant efficiencies could be made that meant the transformer wasn’t needed. As David observed, implementing a well-researched sustainability plan can actually save on both utilities and capex costs. “We had another client, a construction firm, who put in bids for five major projects. Every single one of their clients wanted to know their sustainability credentials, and when they visited other builders’ websites, those credentials were on the home page. Sustainability, and communicating what actions you’ve taken to achieve this, have become essential to doing business in the sector.” He explains that businesses also have to consider their employer brand, in view of today’s skills shortages. People are looking for employers whose values align with theirs, and in many cases, who are actively demonstrating their progress on sustainability and decarbonisation. “When we talk about investing in sustainability, we’re not just talking about environmental sustainability but business sustainability – your ability to retain staff and customers, and their perception that your business is viable into the future,” says David.
Get with the programme
Another major reason that businesses predict they’ll fail to meet their decarbonisation targets is that they are unsure how to monitor their emissions, giving them no clear baseline or way to chart their progress. At Total Utilities, we have dramatically pivoted our business model over the past few years from supporting businesses to monitor and reduce their utility overheads from gas, water, electricity and cloud consumption – to using that data to measure your carbon footprint and support a sustainable transition. Our evolution reflects the fact that in recent years decarbonisation has moved from something just a few, ‘eco-conscious’ businesses or big emitters have focused on, to being embraced by the majority of NZ businesses. The government’s Climate Change Response Act enshrining the net zero carbon by 2050 target in law, as well as a raft of other legislation and consumer demand, have added further pressure to address climate change. The message to NZ business is clear – get with the programme or get left behind. There’s no doubt achieving net zero carbon will require significant investment and commitment right across the board. But turning New Zealand’s poor performance around relies on rapidly turning the tide on our mindset about cost vs value of decarbonisation.
- Need help calculating and reducing your carbon footprint? We’re here to help! Contact us at Total Utilities.
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