Vector: taking leadership, taking action and not just talking about it
1 February 2018 - Simon Mackenzie, Group CEO of Vector, New Zealand's largest distributor of electricity and gas, describes how CISL has helped to build leadership and embed sustainability across his organisation - from deepening the understanding of its leaders on the sustainability agenda to helping its board set a strategy to help Vector become a long-term, sustainable business that all staff understand and subscribe to.
I heard about the University of Cambridge Institute for Sustainability Leadership (CISL) through my Chief Risk Officer who attended The Prince of Wales’s Business and Sustainability Programme (BSP). After doing my own research, I decided to sign up to the course with a view to gaining a greater understanding of the sustainability agenda and explore how the Sustainable Development Goals (SDGs) related to my business and future strategic challenges and opportunities.
It was important to be able to hear from thought leaders and gain insight into how other business leaders were engaging with the concept. I wanted to see the sustainability agenda through a lens that would help inform Vector’s strategic approach.
Consistency and understanding
A key driver for attending the course was developing a consistency in organisational understanding to catalyse our strategic initiatives and ultimately embed sustainability at their core. Alignment is so important for business and everyone within the organisation must undertake this journey together with the same points of reference; common perspective is essential.
Attending the BSP in Melbourne brought me into contact with relevant speakers and my cohort included a range of people from different business backgrounds. We explored how other businesses were approaching sustainability and the challenges they faced aligning it with their strategies. At the start of the course, some businesses viewed sustainability as a ‘tick box’ exercise, the responsibility of just one person, while the rest of the organisation carried on with business as usual. Such a shortsighted approach was completely at odds with my belief that it is a collective undertaking that requires cross-organisational buy in. Thankfully, such perspectives shifted by the end of the course.
Organisational alignment
Since I attended, Vector has sent six delegates on the BSP and two took part in the Sustainability Practitioner Programme. Most of our board of directors attended the Non Executive Director Programme in 2017. Sending multiple delegates on the course has afforded us greater organisational alignment when having strategic discussions, setting objectives and targets relating to sustainability.
This approach has enabled us to integrate it into all our strategic thinking and in particular opportunity identification. The benefits have extended to changing the way we approach our annual report and how we think about climate change impact and modelling. We have also rethought our approach to social responsibility and changed the way we engage with the debate on minimum wage. And by taking part in a range of CISL courses our employees have now become advocates for adopting a sustainable approach to the rest of the business.
By having our board attend the Non-Executive Director Programme we were able to also ensure we were all aligned to become a long-term, sustainable business using a common platform that everyone could understand and subscribe to.
Our long-term outlook, focusing on social and environmental responsibility as well as commercial outcomes, frames all the decisions we take as a business. For instance, when we are exploring the potential of a new piece of energy technology, we now consider how this would, amongst other things, also affect consumer affordability and environmental impact. In a shift from past practice, we now focus on how to align with the seven Sustainable Development Goals (SDGs) we are pursuing, and examine the assets in our portfolio of businesses through the long-term sustainability lens. The business case now includes a question on whether there is also a consistency with our other objectives, such as supply chain management and affordability.
We’re now looking at issues such as innovation, clean and affordable cities and mapping how our assets would be affected by climatic changes, such as the associated sea level rise, and what our response to such changes would be.
Aligning with the SDGs
Setting targets for achieving net zero carbon emissions by 2030, having that long-term vision, is a definite impact that came out of the course. We formed a sustainability subcommittee of the board to discuss what initiatives we needed to achieve this ambitious target, how they aligned with seven SDGs and our role in demonstrating sustainability leadership in New Zealand. I did this because I firmly believe that we have a significant role to play in this transition and can’t simply sit back and wait for government to take the lead. I do believe that from my engagement with CISL I have more confidence when speaking to Government policy advisors.
I am a member of the New Zealand Sustainable Business Council Advisory Board and we recently had a session with a number of CEOs who signed up to a set of carbon targets and talked about the need to show leadership, but framing it as an opportunity rather than a problem.
Innovation and affordability
Vector lights will illuminate Auckland’s iconic Harbour Bridge and features a ground-breaking renewable energy technology-powered light show. This will showcase to the community what is possible from an energy perspective. It will also show how we are aligned to innovation and affordability whilst also giving back to the community.
Our continued relationship with CISL, which will see more staff study with them shortly, has involved us bringing over key speakers to New Zealand to talk about the impact of climate change; something that has had a huge impact on a range of people across the business and helped them comprehend the urgency with which we need to address the issue.
We are building momentum and whilst I would be the first to say we’re not perfect, I can say we are ahead of the curve, taking leadership, taking action and not just talking about it.