New Zealand’s 2019 Budget was heralded as part of a new and forward-thinking approach to understanding and shaping the success of the New Zealand economy and citizens. As well as outlining where the government will spend and invest in the coming year, this budget – billed the Wellbeing Budget – seeks to broaden how success is perceived by incorporating wellbeing indicators and giving them weight in-line with traditional economic indicators.
The impact traditional business and industry behaviour are having on the environment and on people’s standard of living is becoming more widely studied and reported, both in New Zealand and overseas. The rate of technological advancement in the last few centuries (a relative blip on the timeline for human population of this planet) has resulted in rapid changes to our ways of living and to our environment. Research on the impacts of these changes to human physiology and psychology, and on our impact on the environment, continues to be published in ever-increasing volumes.
In line with this, the rate at which humans have been required to adapt to change has increased exponentially over the last 40 years. However, our business models and approaches have lagged behind. Success indicators for national economies have remained largely the same for decades.
In New Zealand, since the turn of the century, entire new industries have come to exist. Our largest city has officially become ‘super diverse’ and our connection and connectivity with other nations is markedly different. With climate change now scientifically indisputable, and youth and male suicide levels in New Zealand leading global rates, there is a groundswell within pockets of the business community to do business in a way which influences and addresses some of the serious social issues facing our population. There is an increasing appetite within business to be ‘better’, and ‘better’ is no longer exclusively defined as increased shareholder return.
One initiative that is rapidly growing in response to this desire is B Corporation. A global community, certified ‘B Corps’ do business differently. There are five key focus areas for a B Corp business: workers, community, environment, customers, and governance. To a B Corp, success looks like a more sustainable and inclusive economy which benefits communities and society.
The 2019 Wellbeing Budget focuses on four key areas: mental health, child wellbeing, supporting our diverse population, and developing our economy for the future. The Government has aimed to embed wellbeing principles into each of these Budget areas. This aligns directly with how B Corps strive to run their businesses – by understanding the impact of every action taken by the business, their employees, and even their customers, on their people, their communities, and the environment.
The allocation of $1.5 billion toward mental health and wellbeing and $5.7 billion to improve child wellbeing over the next 5 years has been widely applauded as a promising, and perhaps overdue, step. This is part of a growing movement, traditionally led by non-profit organisations, to equip younger generations with the tools to be resilient and to manage their mental wellbeing through their lives. Research indicates that around 20% of New Zealanders experience mental health issues every year, with a cost that amounts to 5% of our GDP annually.
Research has consistently shown that investment in employee wellness can have a positive impact on employees and their lives beyond work. The Government has addressed this through two priority areas within the Budget: Taking Mental Health Seriously and Improving Child Wellbeing. This shift brings the government-set direction of New Zealand in line with B Corp values, where impact on both community and workers is measured with links to these priorities. These values ensure staff are cared for through challenging times and acknowledges the important role that parents and caregivers have in looking after our tamariki. The increased funding for new and existing initiatives which support and educate parents and caregivers and improve outcomes for the youngest members of our society, recognises what B Corps already practice. With the Wellbeing Budget providing a nationwide platform, B Corp businesses in New Zealand are further encouraged and empowered to value their employees’ wider contribution to, and roles within, our communities.
Along with the alignment to the overall philosophy of B Corp, the inclusion of health and wellbeing initiatives within the budget strongly resonates with Redvespa’s Business for Good work. One such Business for Good initiative is the book, Your Kingdom: a guide to wellbeing and potential. Written specifically for youth, Your Kingdom provides tips, strategies, and stories aimed at helping young people deal with the challenges they face. The development of Your Kingdom inspired Redvespa to think big in terms of social impact, leading to the pursuit of B Corp certification. It continues to be a foundation document for wellbeing within Redvespa. Outside of the company, the impact it is having on the community has been reinforced through stories from those who have used it in working with youth.
Environment is one of the five areas covered by the B Corp certification process. Evaluating businesses across 25 environmental measures, B Corps are encouraged to monitor and establish processes to reduce the environmental impact of their energy consumption, greenhouse gas emissions, and waste. These practices directly align with a number of the Government’s initiatives under the Budget’s Transforming the Economy priority. In this area of the Budget, future-proof economic growth is aligned with transitioning to a low-emissions future. From 2019-2023, some $4.6 billion has been committed to initiatives in this area.
Within the Budget allocation, $1 billion dollars within the Provincial Growth Fund has been directed towards the redevelopment of Kiwirail. Directed by the Climate Change Response Act 2002, successive Governments have committed to funding infrastructure and climate change projects that will aid New Zealand in achieving a low-emissions future. The increased investment in rail reflects its position as the transport mode with the lowest level of emissions. If the redeveloped rail network offers scalability and resilience, it may well become a viable option for B Corps as part of their supply chain, further reducing their emissions.
Any initiatives which enable emission reduction over emission offsetting are to be applauded, however offsetting will remain the most viable option for some time while alternatives are developed. Currently, businesses engaged in certain agricultural activities are not obliged to surrender New Zealand Units (NZU). In simple terms, this means they don’t have to offset their emissions. However, with the proposed changes under the Wellbeing Budget, and with the target to achieve net-zero carbon emissions by 2050, the agricultural and other excluded sectors will have to offset emissions with NZUs.
At the root of all these carbon-reduction measures is a commitment to counter climate change. In 2021, New Zealand’s commitment to the Paris Agreement takes effect. This will see New Zealand working towards reducing greenhouse gas emissions to 30 per cent below 2005 levels by 2030. The Wellbeing Budget provides $107 million to ensure the economic transition required to deliver those emission reductions is effective, efficient, and just.
Outside of the development of Your Kingdom, sustainability was an early driver in Redvespa’s Business for Good work. Our internal Business for Good Champion developed a case study for our sustainability initiatives which helped set the tone in this area. This document led to the company adopting the ambitious target of becoming net-carbon neutral within three years. In 2018, this commitment to carbon offsetting saw our staff Christmas party officially classed as carbon zero. This year, through our inaugural Business for Good Impact Report, we have developed our Business for Good Values to drive our work. Many aspects of these Values touch on the Budget priority of Transforming the Economy. One area where we have been explicit is climate change, defining our position as:
Redvespa are committed to making business decisions that are environmentally positive and we believe that climate change is one of the defining issues of our time. Acknowledging the importance of the issue is not enough, and taking action is vital. Where Redvespa cannot take direct action, we will support the work and voices of those who are.
There is no perfect budget. Like the governments that develop them, they have been, and always will be, criticised. 2019’s Wellbeing Budget has been heralded as a world first and analysed for its role in promoting a different way of measuring or investing in the economy. New Zealand, like any country, faces a multitude of challenges, each calling for investment. Some have, and will continue to, argue that money could have been allocated to other, better, initiatives. Others challenge the assumptions made regarding economic and environmental outlook. Shifting the perspective as the Wellbeing Budget is a brave step, and one that many governments are reluctant to take.
For business, there is a growing appreciation for the value of purpose. Because of this, the community concerns which have driven the creation of the Wellbeing Budget have become an important part of business strategy and decision making. B Corps are ahead of the curve in this respect, with the rigorous certification process ensuring that purpose and being ‘good’ is at the core of sustainable business operations.
The Wellbeing Budget helps set the tone for the nation, but the initiatives it will fund and inspire need buy-in beyond dollars and cents. As organisations and individuals, we have a role to play in building inclusive societies and adopting sustainable practices. B Corps, in conjunction with their people and their communities, are uniquely positioned to maximise and realise the potential of the Budget.