SUSTAINABILITY MIKE BURRELL
Sustainability leadership: the way of the future
Mike Burrell, the Sustainable Business Council’s new Executive Director, talks about how sustainability leadership makes good business sense.
E
nvironmental and social issues are shaping up to be some of the most significant opportunities and challenges for businesses in the coming years. The pace of change and scale of the challenges facing enterprises require a new type of leadership. Business leaders need transformational strategic thinking, creativity, innovation and personal resilience.
Responsible investing now accounts for more than 70 per cent of total assets under management by New Zealand fund managers. Traditionally, the perception has been that sustainability and profitability cannot co-exist, but this continues to be disproven. Sustainability leadership is now a platform for growth and profitability within your business. Businesses 14
HUMAN RESOURCES
AUTUMN 2020
with environmental, social and governance principles embedded into their strategy can better mitigate risk and drive profitable growth.
assessing environmental, social and governance factors that tie into the United Nation’s Sustainable Development Goals.
The proof is in the pudding: a massive uptake of responsible investment practices has been seen by New Zealand fund managers in the past two years, on the back of client demand.
Last year, the International Monetary Fund (IMF) found the performance of sustainable funds is on par with that of conventional funds. The IMF estimates more than 1,500 equity funds exist with an explicit sustainability mandate.
KPMG’s Responsible Investment Benchmark 2019 New Zealand report showed the following main findings: • responsible investment grew to NZ$188 billion in 2018, a threefold increase over five years • New Zealand leads other major markets, with the highest level of take-up of responsible investment • the focus is shifting to finding positive investment opportunities in addition to screening out harmful sectors. Responsible investing has emerged as a fundamental practice for New Zealand’s fund managers and now accounts for more than 70 per cent of total assets under management. The uplift was mainly due to mainstream investment funds making a switch to incorporate responsible investment, such as negative screening, and
Investors are increasingly putting money into companies with good track records on environmental, social or governance issues. Any suggestion of a trade-off between financial performance and sustainability has been proven false.
We’ve now reached a stage where there is no trade-off between financial performance and sustainability. In fact, the recent Sustainable Business Council’s In Good Company report tells us that New Zealanders really want to know more about what businesses are doing and that there is a big opportunity for the business community to showcase its leadership better.
