Better models, better business

Nearly 100 billion tonnes of virgin resources are extracted from the earth, manufactured, distributed and sold by businesses and governments to be consumed every year as packaging, beverages, fridges, cars, houses, food on our plates and clothing. Yet, less than 8% of those resources are cycled back into the economy to use again.

Three Kiwi companies have made moves to improve this situation. The boards of Silver Fern Farms, Profile Group and Lion have adopted a strategy of assessing and reducing waste and the preponderance of single-use materials in their business models. In association with Circularity, each took steps to identify, measure and design solutions for their linear material risks.

At a Director Lens on Resource, Risk and the Circular Economy webinar, hosted by the IoD’s Chapter Zero NZ, they agreed that change is not always easy, but big things can be achieved with small ideas.

At Silver Fern Farms, the circular economy has been identified by the board as one of eight “material issues” to try to improve, says director Jane Taylor. The board’s approach has been to find ways to create value while reducing waste.

“We do see this as a value-creation part of the business,” Taylor says. “We have researched the factors that cause the business to create waste and put in place measures to design them out of the system.”

Silver Fern Farms first established a baseline of its waste profile and then set targets for the reduction of organic and non-organic waste. Initiatives ranged from sustainable finance practices at the top end to reducing single-use personal protective equipment – colloquially “gumboot recycling”.

The company entered into a loan agreement that included reduced interest rates if sustainability targets were met. Two of the key metrics are reductions in the total waste sent to landfills, and reduction in water usage.

“If we achieve these goals, this will result in real savings for the company through interest rate concessions.”

Taylor says seeking ways to become a more “circular” business has had a positive impact on the culture of the organisation.

“That is a huge positive and one that translates through to our customers, consumers and supply chain.”

Profile Group supplies the aluminium used in New Zealand’s construction industry for doors and windows. When the company sought to understand its waste profile, and the potential for improvement, it uncovered a “horrifying statistic”, says sustainability lead Mikayla Plaw.

“That statistic was that we could wrap 25% of the planet in plastic wrap alone, just our business in little old New Zealand,” Plaw says.

With some hard thinking and determination, Profile Group found a way to recycle plastic wrap into other packaging material, which is then put back into the business.

“We designed out a single-use part of our packaging,” she says.

The business also set up a joint-venture with a hydro station in the South Island that enabled it to reduce its carbon footprint related to energy use.

“We are essentially energy neutral by offsetting our energy consumption with the hydro station, which is obviously fully renewable. That’s been an amazing story and is something we are really proud of,” Plaw says.

At Lion, the need for new ideas came to the fore with the acquisition of US craft brewery New Belgian Brewing. The brewery was B-Corp certified, which means it achieves high standards in social and environmental performance.

“Lion always had a value of doing the right thing for the long term, but we didn’t always know what that meant,” says accelerated change manager John Steiner.

New Belgian Brewing had a mission that was to be a force for good in the short term. It encouraged the Lion board to adopt similar language on behalf of the whole organisation.

The Lion board “put some language” around that, Steiner says, requiring business units to demonstrate brave and enduring environmental leadership. This created a culture in which rethinking operations from an environmental perspective is encouraged and teams are proud to move towards a “circular” business model.

“Those words were really motivating, particularly for New Zealand. We are one of the most eco-conscious populations in the world,” Steiner says.

The Director Lens on Resource, Risk and the Circular Economy webinar was presented by IoD Chief Executive Kirsten Patterson and featured comment from Jane Taylor CFInstD, a director of Silver Fern Farms, Mikayla Plaw, GM of sustainability at Profile Group, John Steiner, GM accelerated change at Lion, and facilitator Louise Nash of business consultancy Circularity.

Find out how your business can join Silver Fern Farms, Lion and Profile Group to measure resource risks and start exploring circular solutions here.