I began my journey to a sustainable future envisaging a world of tree-hugging, lentil soup and freedom from reporting fuss. Little did I know that the bureaucrats had got in ahead of me and set up a rules-based order that made tax returns look like a walk to the dairy.
It turns out that the United Nations, Ministry for the Environment, MBIE and agencies like Toitū, the Green Building Council and NABERS, all have stringent requirements for the benchmarking, measurement, auditing and verification of greenhouse gas emissions, energy efficiency and carbon footprint.
As I first looked at the reporting requirements it was quite off-putting. Would businesses really put up with this level of bureaucracy? How many private companies would be willing to divulge what could be very sensitive competitive information? Just where would businesses find the resources to report with the level of accuracy demanded?
Paperwork, compliance & more compliance…
And last month the compliance demands got even more stringent.
Any company listed on the NZ Stock Exchange and with a market capitalisation of over $60 million will be required to report on all its direct emissions with the regime commencing on 1st January next year, 2023.
To be specific, if your financial year ends on 31st March 2023, you will be expected to be able to verifiably report on a whole year’s carbon emissions, risks and remediation in full as of the year commencing 1st April 2023 to the 31st March 2024. If your year ends on the 30th of June, then you have a little more time to prepare, with reporting commencing on the 1st July, 2023. Annual shareholder reports just took on a whole new sustainability focus.
If your company is privately held or has a market cap of less than $60 million, this is no time to breathe easy. The new $60 million number is down from $500 million previously. Expect the government to widen its orbit once it has systems in place to demand more from the average medium scale business.
Before readers start crying, “Government overreach and political interference gone mad,” this new government mandate is only one of a series of sustainability challenges facing businesses.
It’s not just about the mandatory GHG and Carbon reporting for bodies like Toitū. It’s about shareholders and stock exchange reports, board reports, executive updates, feedback to staff and stakeholders.
Sustainability – the ‘Data Monster?’
It’s easy to think of sustainability as a data monster with no end to its demands on your businesses time and skills and with little benefit to show for it.
But then if you ask business influencers and stakeholders about their motivation for taking a sustainable position, it turns out there are many different reasons people choose a path to sustainability:
- Government mandated reporting
- Cost reduction
- Saving money
- Being more efficient
- Supplier and customer demands
- Recruitment and retention of the new generation of environmentally aware talent
- Shareholder owners themselves who have defined a policy that reflects their own commitment to a sustainable future
These intended uses help form the policy and action statement that an organisation will formulate and highlight in communication with regulatory bodies and key stakeholders.
They also define the priorities which drive choices and resource allocation.
Finally, they define the type and depth of reporting that an organisation will commit to delivering in the years and possibly decades ahead.
As Peter Druker, founding father of modern business management so succinctly put it, “If you can’t measure it you can’t manage it.”
Unfortunately, ‘screw the paperwork’ just isn’t going to cut it anymore.