18th Jun 2024 Gemini 1.5 Pro
Florence Van Dyke, co-founder of Chia Sisters and Global Sustainability Lead at New Zealand Trade and Enterprise, discusses her career path and the evolving landscape of sustainable business practices, particularly the impact of new regulations originating from Europe. Her diverse background in law, entrepreneurship, and now government, provides her with unique insight into the challenges and opportunities facing businesses in a rapidly changing world. Reflecting on her transition from the fast-paced world of a startup to the broader perspective of government, Florence says:
"...it's also nice to look at the big picture and realize that actually the most impact that I can have is influencing other businesses and supporting our economy to make that shift rather than the day-to-day grind of small business."
This shift underscores her belief in the power of collective action and the need for systemic change to address global sustainability challenges.
The discussion highlights the significant influence of European Union regulations on global sustainability standards. Regulations like climate-related disclosures and the Corporate Sustainability Reporting Directive (CSRD) are compelling businesses worldwide, including those in New Zealand, to measure, disclose, and ultimately reduce their environmental impact. These regulations, initially perceived as a European issue, are rapidly becoming a global standard, impacting businesses of all sizes. Florence emphasizes the far-reaching effects of these regulations:
"And the knock-on effect given the interconnected nature of our economy globally is massive."
This interconnectedness means that even small businesses in New Zealand, like the example of Golden Bay Fruit, are now required by their international customers to meet stringent sustainability standards.
The CSRD is a game-changer in the sustainability landscape. It expands reporting requirements beyond climate change to encompass broader sustainability issues, such as modern slavery, deforestation, and biodiversity. This expansion reflects a growing understanding of the interconnectedness of these issues and the need for a holistic approach to sustainability. The CSRD underscores the increasing demand for transparency and accountability throughout global supply chains.
"It's not good enough just to say, oh, I'm not sure where I get that product from in my supply chain. You need to know where it comes from and be able to prove that it's ethical as well."
This statement emphasizes the shift towards greater scrutiny and the need for businesses to take responsibility for their entire supply chain.
The CBAM, a carbon tax on high-emission imports into Europe, further incentivizes businesses globally to reduce their carbon footprint. This mechanism levels the playing field by ensuring that businesses operating in countries with less stringent environmental regulations cannot gain a competitive advantage by exporting high-emission products to Europe.
"...it will disincentivize outsourcing the production of high emission activities to countries which might not have carbon regulation because at the end of the day, there'll still need to be a carbon tax applied when it hits that European border."
This mechanism incentivizes a global shift towards more sustainable practices by internalizing the cost of carbon emissions.
The conversation also highlights the significant growth of sustainable finance in New Zealand. Investors are increasingly interested in the environmental, social, and governance (ESG) performance of businesses, with many actively seeking out businesses with strong sustainability profiles. This shift in investor sentiment is driving a surge in sustainable finance options, such as sustainability-linked loans, which offer lower interest rates to businesses that meet predetermined sustainability targets.
"They're doing this because sustainable businesses that understand their broader stakeholders, their supply chain, the impact on Papatūānuku, on their community, on their team, these businesses are proven to be more resilient in the face of global challenges and complexities."
This shift underscores the growing recognition that sustainable businesses are not only good for the planet but also make sound financial investments.
Airtable