Take off the blinkers: Sustainability and Raw Materials

Take off the blinkers: Grant Thornton’s latest global business report

Tuesday 7 October 2014

The latest Grant Thornton International Business Report (IBR) survey reveals that New Zealand businesses are among the least concerned in the world about future access to raw materials. This begs the question as to whether there is a need for businesses to “take off the blinkers” and commit more time to assessing environmental sustainability.

The latest IBR report compares the views of more than 2,500 senior decision makers in 34 economies on the cost, availability and sustainable use of raw materials and energy.

The report reveals that less than half (42%) of those surveyed in New Zealand consider that ongoing access to raw materials is an issue (compared to the global average of 53%), and that only 40% thought it was important that raw materials came from sustainable sources.

Mark Hucklesby, Partner Audit, and National Technical Director at Grant Thornton New Zealand, says of 34 economies that were included in the report, only five demonstrated less concern than New Zealand about raw material access; Italy (38%), Sweden (37%), Canada (36%), Thailand (35%) and China (27%). By contrast, Botswana (90%) and India (86%) showed the highest level of concern.

“These findings tell us that businesses in New Zealand largely don’t see any substantial threat to their supply of raw materials. This is both interesting and concerning, as it suggests the message about sustainable use of resources is an issue that may not be getting sufficient airtime in boardrooms and chief executive offices.

“In emerging markets cost, reliability and sustainability of both energy and raw materials are seen as prerequisites for business expansion. However, here in New Zealand, it’s not as high up on the priority list in terms of their decision-making.

“Failure to take off the blinkers and focus on how their current level of access to raw materials and energy could change may prove costly in the longer term” However, Mr Hucklesby recognises that telling companies they need to do things differently will not be enough.

“The sustainability debate within business should be viewed as an initiative that will ultimately improve financial returns to shareholders rather than being narrowly viewed as a cost of business that’s incurred for public good.

“Our survey results reconfirm that when it comes to sustainability, New Zealand business owners should focus on what can be done today to save costs in the future, rather than assessing the topic solely through what is the cost of doing very little or nothing today."

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Notes to editors

The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of more than 10,000 businesses per year across more than 30 economies.

This unique survey draws upon 22 years of trend data for most European participants and 11 years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com

Data collection

Data collection is managed by Grant Thornton's core research partner – Experian.

Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.

Sample

IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with more than 2,500 chief executive officers, managing directors, chairmen or other senior decision-makers from all industry sectors in mid-market businesses in 34 economies conducted in May 2014. The definition of mid-market varies across the world: in mainland China, we interview businesses with 100-1000 employees; in the United States, those with US$20m to US$2bn in annual revenue.

About Grant Thornton International Ltd*

“Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions.

*All references to Grant Thornton International in the press release and this “Notes to editor” section are to Grant Thornton International Ltd. Grant Thornton International Ltd is a non-practicing, international umbrella entity organized as a private company limited by guarantee incorporated in England and Wales.

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