Building the opportunity side of the equation
Insights from Director, Bridget Coates CFInstD
As part of Hobson Leavy’s role as a Foundation Partner of Chapter Zero, we have spoken to several leading New Zealand directors, seeking their insights and thoughts on the climate challenge, through their experiences in the boardroom.
Interested in some of the biggest challenges facing our non-executive directors, we wanted to know what impact climate change is having on the strategies of businesses within their portfolio, and what changes are in motion as a response.
Competing priorities are a familiar challenge for non-executive directors, but how are they balancing these priorities and putting in place tools to keep pace with the climate challenge?
Hobson Leavy discussed the climate challenge with Director, Bridget Coates CFInstD, who offers insightful commentary from her executive and governance career spanning sectors such as technology, construction, sustainability, financial services, and the primary sector. Bridget also contributes her expertise from her recent role as inaugural Chair at the Centre for Sustainable Finance: Toitū Tahua.
Our discussion with Bridget was wide ranging, however, notably framed within the view of an Opportunity Response to Climate Challenges.
“Our immediate challenge going forward is ensuring we don’t overlook the opportunity side of the equation. We’ve focused so heavily on risk and compliance to date. The next step I believe is to translate our climate progress into authentic and meaningful narratives which appeal to our global investors, customers, consumers, and employees.”
From risk & compliance to opportunity
For the last two to three years, climate conversations in many boardrooms have been focused on risk and compliance. “Fortunately, we are starting to redirect this work and analysis into working out how we can win in the global marketplace, drive revenue, generate new business opportunities and attract the global capital that we urgently need”.
Bridget sees compelling narratives and effective story telling as key techniques for NZ to attract attention in global product and investment markets.
Her reflections from her role as Chair of New Zealand’s largest producer of manuka honey, Comvita, included the importance of showcasing Comvita’s climate credentials, including its BCorp accreditation, and explaining clearly the brand’s environmental progress in NZ and globally. She said these credentials are now critical for Comvita’s major retail partners in the northern hemisphere.
“Our customers are increasingly asking us for validation of our sustainable and ethical procurement practices, in managing our human rights policies, climate footprint, environmental stewardship and circularity, and reducing our nature and biodiversity impacts.”
In Bridget’s mind, a meaningful sustainability strategy and climate metrics communicated well are “now a ticket to the game… table stakes in global markets for many of our companies who are pitching to global retailers… But once you’re in the door you need to communicate your sustainability story in a way that is compelling for consumers.”
Attracting global capital
NZ’s reliance on revenue generation and capital investment from offshore means it is essential that we make it easy for investors and capital providers who are seeking opportunities in New Zealand. Investors need to “see a sustainable finance system that is sufficiently recognisable and aligned” with our key partners, particularly Australia and Singapore. This includes defined taxonomy structures, clarifying NZ’s climate transition plans, and our long-term strategies for our key infrastructure sectors.
“We are a small country, we are easy to ignore. To attract the global capital we need, we need to make it easy for investors who must firstly meet their over-riding sustainability objectives. We need to present investment opportunities which are based on globally aligned frameworks so they can evaluate those investments more quickly and with greater confidence”.
Despite there being plenty to do on the topic of sustainability, Bridget feels our global businesses can take pride on our collective progress on the sustainability journey.
“We are privileged to have a high proportion of green energy, and we have many companies innovating successfully to create new products or improve the sustainability of their existing products and processes. It gives all our exporters a strong tail wind if our overall NZ story is credible and validates the sustainability positioning of our individual businesses”
Doing sustainability well opens talent opportunities
The topic of talent attraction and engagement falls neatly within Bridget’s opportunity mindset. Companies that are doing sustainability well and have a clear strategy will likely find more success attracting the right talent. Potential team members are frequently considering company sustainability credentials and intentions as they evaluate their prospective employers. Telling a compelling sustainability story will also help with retention of high performing, values driven employees, and for long-term employee engagement.
“When you want to attract high potential young leaders to join your company, a key part of the equation is telling your climate and sustainability story authentically and compellingly.”
Progress at the Centre for Sustainable Finance: Toitū Tahua
After 3.5 years as inaugural Chair of the Centre for Sustainable Finance: Toitū Tahua (CSF), Bridget has recently handed the reins to Matt Whineray. Reflecting on her time at CSF, she shared it is “very gratifying to have moved on from whether we should respond or not, having to convince people in the early years… that phase is completely gone and now the discussion is all about implementation and the climate journey.”
Bridget praised the work of Chapter Zero, the Institute of Directors, the Sustainable Business Council, Aotearoa Circle and Toitū Tahua: Centre for Sustainable Finance’ in raising the understanding and expectations of Directors duties with respect to sustainability.
Whilst NZ is ahead of the curve relative to some of our key APAC partners on mandatory climate reporting, (particularly across our Top200 companies and large government departments), she shared there is still important work underway on NZ’s sustainable finance strategy and taxonomy frameworks.
Key takeaways:
- Climate conversations in the boardroom now need an opportunity lens applied. Boards could ask themselves:
How can our sustainability strategies help us to win in the marketplace? - How can our sustainability progress drive new revenue streams?
How can our credentials help to benchmark us favourably against our global peers? - What are the product development opportunities to take advantage of new climate and sustainability related market segments?
- It’s time to take the data and analysis gathered over the last 2-3 years and collectively create compelling narratives that tell the NZ story.
- Communicating business climate credentials and what NZ is doing to protect and build the planet in a meaningful way is critical in attracting the global capital NZ needs.
- NZ needs to have a system that is sufficiently recognisable and aligned with key APAC partners to reduce barriers for offshore investors – it is important offshore investors see the same language and data frameworks used.
- Telling the NZ story offers opportunities to attract the right talent and increase staff engagement – sustainability is a key consideration for new talent joining your workforce.
- Toitu Tahua: Centre for Sustainable Finance, alongside the Sustainable Business Council, Chapter Zero, and the IoD are driving awareness and understanding for board directors on key climate priorities.
We would like to thank Bridget for her important work at the Centre for Sustainable Finance: Toitū Tahua, and for her insightful commentary during our interview.
In addition to Bridget’s Chair role at Comvita, she is a director on the board of Yealands Wine Group, Chair of Koi Tū: The Centre for Informed Futures at the University of Auckland, and is a Trustee and Director of Mindful Money. She is a former Chair of Fonterra’s Sustainability Advisory Panel, Governor of the NZ Superannuation fund, a Director of the Reserve Bank of New Zealand, and more.
