“Tonight, the Australian people have voted for change,” said Australia’s new Prime Minister, Labor party leader Anthony Albanese, in his victory speech.
Not a change to Labor, which got only 32.1 percent of the vote on election night, two percentage points lower than it did in 2019. (Not that Albanese mentioned that in his speech.)
But a change of focus. A move away from former leader Scott Morrison with his lump of coal, his focus on economic performance at all costs, and his climate change skepticism, towards policies which take seriously things like environmental sustainability, gender equity and integrity.
The Australian voters, as they say, have spoken.
There’s a warning in there for New Zealand politicians, to be sure. The rise of the teal independents – professional women, right leaning and environmentally aware – is a strong signal about voter priorities.
This side of the ditch, the success of the Australian teals should remind Labour leaders they need to take business seriously, and the National Party that they ignore the green vote at their peril.
But there’s also a message for New Zealand businesses: voters are also consumers. And if Australian voters are looking are looking for a new focus on ESG (environmental, social and governance) values, customers on both sides of the Tasman are likely looking for the same thing.
Nicola Nation has a background in procurement, banking, property management and government. Now she’s chief executive of social enterprise organisation Ākina.
She says the election result is “fantastic.”
“Investors are demanding better, consumers are demanding better and employees are demanding better, as backed by loads of data – and this is another example of this.
“It’s a sign consumers and citizens are demanding sustainability and community as part of business practice. It’s a sign of the importance of purpose-led business, that ‘business for good’ cannot be ignored.
‘A desire for action’
Wellington-based company Cogo sells an app to banks which allows their customers to monitor and reduce their carbon footprint.
The Australian election result has the potential to move the dial in terms of sales, says business development director Josh Dry.
The company launched its carbon footprint tracking into the NatWest Bank in the UK in November last year, and has since picked up the Commonwealth Bank and Suncorp in Australia, as well as Dutch multinational ING.
It has 80 staff and hopes to grow that to 150 by the end of the year, as well as move into four new markets, including the US, Hong Kong and Japan.
“The Australian election reflects an increased awareness from consumers and a desire for action,” Dry says. “Banks are hearing loud and clear that these are important issues for their customers and they need to roll out solutions.”
As well as the potential for more Australian banks to pick up the Cogo product – and hopefully their New Zealand subsidiaries to follow suit – Dry says the mood around the world will help the company as it looks to raise up to $US30 million in venture capital funding later in the year.
“There’s a lot of interest in social impact investing, and in climate and sustainable fintech,” he says. “A lot of funds want to invest.”
A $10 million private equity fundraising last year was five times oversubscribed.
Dry says the move to the independents and the Greens in the Australian election took a lot of people by surprise.
“It shows climate action is a groundswell and people that want to do better are not a niche demographic, it’s becoming mainstream – and that’s great for us – and the planet.”
It’s the same message from Barry Coates, founder and chief executive of not-for profit investment comparison site Mindful Money. The warning signs for ScoMo and the Liberal coalition were there loud and clear in the investment space, he says.
A survey from the Responsible Investment Association of Australasia released in April found four out of five Australians (83 percent) expect their bank account and superannuation funds to be invested responsibly and ethically, Coates says. Three quarters (74 percent) of people in the survey (“From value to riches 2022: Charting consumer demand for responsible investing in Australia”) said social issues were important to them when it comes to investing their money, up from 64 percent in 2020.
“Over a period of time, we have seen a growing social and environmental ethic in Australia around consumers and investors, so it’s not surprising it’s reflected in the ballot box.”
– Barry Coates, Mindful Money
Meanwhile, 84 percent of the Australians surveyed said it was important their bank or super fund committed to reducing greenhouse gas emissions, 83 percent wanted their financial services providers to set targets for emissions reduction, and 81 percent wanted a pledge to achieve net zero emissions by 2050.
Mindful Money produces a sister survey in New Zealand. Coates says in several areas, Australians are more committed to ethical investment than their Kiwi counterparts.
“Over a period of time, we have seen a growing social and environmental ethic in Australia around consumers and investors, so it’s not surprising it’s reflected in the ballot box,” Coates says.
“Businesses know this stuff, fund managers know it.”
Another thing Coates isn’t surprised about is the powerful message from women voters in the Australian election, as reflected in the success of the teal candidates.
“The intention to invest ethically and the wish to avoid investments which are contrary to their values is strongly biased towards women in the surveys,” he says.
In the Australian survey, between 87 percent and 89 percent of women expected their money to be invested responsibly and ethically, compared to 78-80 percent of men.
In the New Zealand survey, the split was even higher – 80 percent of women expected their money to be invested responsibly, as against only 63 percent men.
‘We’ve lived through four years where Government does this stuff.’
Catherine Beard, executive director of Manufacturing New Zealand and Export New Zealand, says in the longer term a focus from the Australian government on emissions reductions will be good for New Zealand businesses.
It might be allowing our companies to piggy-back on new technologies developed in Australia, or using increased purchasing power to get more electric vehicles brought down to this part of the world.
Meanwhile, Sustainable Business Network chief executive Rachel Brown says there are opportunities for her members to team up with Australian companies on trade missions, to get alignment around standards, and potentially to sell products to Australia.
‘Climate is on everyone’s mind’
Nada Piatek is managing director of Again Again, which operates a commercial, reusable container borrow system aimed at avoiding single use packaging.
It started with stainless steel coffee cups, and the company is now expanding into an app-based system which includes beer bottles, takeaway food containers and even sushi trays. In the same way you might borrow a library book, the Again Again app allows people to take home food or beer in a container borrowed from the food outlet, and return it at a later date.
Piatek says many Australians are already “streaks ahead” of New Zealand when it comes to thinking about the circular economy, and the election result should bring government policy in behind.
“Like the rest of the sustainability community we are thrilled,” Piatek says. “It signals climate is on everyone’s mind – it’s a deciding factor.”
If the election result is an indicator of consumer will, it will strengthen the market application for a product like ours.”
– Nada Piatek, Again Again
Again Again is already looking into the export market and could see the system used overseas next year, she says.
“We will be focusing on places that have legislation around single use packaging in place or on the way. The swing in Australia suggests people are supportive of doing the right thing by the environment.”
Meanwhile Piatek hopes ramping up sustainable solutions in Australia will validate and speed up what is happening in New Zealand.
“Companies apply what the market wants. If the election result is an indicator of consumer will, it will strengthen the market application for a product like ours.”
It seems counter-intuitive, but Export NZ’s Catherine Beard believes many Australian companies, particularly the energy intensive ones, will be glad to have a clearer roadmap and more certainty around government policy on emissions going forward – something Australian Financial Review journalist James Thomson confirmed in his Chanticleer column this week (paywall)
“The business community has long called for higher emissions reduction targets and many of our biggest companies have stronger, better articulated climate change plans than the country has,” Thomson says.
“Companies know their social licence to operate and cost of capital depend at least in part on balancing financial returns with matters such as emissions reduction, gender diversity, inclusion and accountability…
“Most [corporate] leaders will welcome more policy certainty as they contemplate the big investments required to cut their emissions and keep their shareholders on side.”
Climate Change Minister James Shaw told Newsroom he hopes to see more of a bipartisan consensus on climate change happening in Australia.
“What that means for business is they’ll have a much more certain and predictable investment space to be working with. In New Zealand, you’ve started to see investments move much more quickly since the Zero Carbon Act was passed because there’s some sense of certainty around the long term direction of the country.”
Perhaps the Australians might learn something from their smaller cousins? Perhaps Australian corporates, or even the new Albanese government, might be interested in New Zealand know-how to help guide them towards a new way of thinking around environmental, social, and governance issues?
“There’s a shit load of stuff coming towards us around ESG,” one commentator told Newsroom. “In New Zealand we know how to operate in this space – whether it’s around consensus politics, a big societal safety net, giving recognition to our indigenous community – or to a lesser extent our emissions trading scheme.
“We’ve lived through four years where Government does this stuff.”