Making Sustainable Links: the well-being of NZ exports in a changing climate

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Making Sustainable Linksthe well-being of NZ
exports in a changing climate

• Cerasela Stancu Ann Smith
• Talking and Walking Sustainability Conference,
  NZSSES
• February 21, 2007

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Content

• Setting the stage
• Trade-related issues
• Consumer expectations - impact on exporters
• Supply chain as a de facto environmental trade
  barrier
• Climate change-related consumer concerns new
  trade barriers?
• Survey of NZ FoodBeverage sector
• Scope of the survey
• Key findings - environmental export requirements
• Discussion
• Conclusion

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NZ and international trade

• WTO framework - lowering barriers to trade
• NZ Trade and Environment Framework 2001
• Win-win-win agendas
• Environmental goods and services
• Eco-labelling
• Pursuing bilateral and regional FTAs
• China, Malaysia and ASEAN under negotiation
• Uncertainty about the integration
  of environmental
  considerations into FTAs

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Trade-related issues and consumer expectations
impact on exporters

• Sales of ethical products growing faster than
  conventional
• Consumer concern/expectations can lead to
  restrictions to market access
• Interest groups use consumer concerns to raise
  standards for products e.g. food miles
• Commercial policies, more than trade policies,
  put environmental requirements on exporters

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Supply chain as a de facto environmental trade
barrier

• Private sector policies account for the
  majority of environmental voluntary
  requirements
• Most targeted sectors food, electrical and
  electronic equipment, textiles, timber, chemicals
• Key issues lack of truly international
  standards or equivalence between standards
  dynamic changes in certification requirements

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Consumer concern about climate change new trade
barrier?

• Extreme events
• Consumer action (fuel efficient cars and
  appliances, local food)
• Yet, consumer information still limited
  (embodied energy vs. emissions)
• Government action
• US state of Californian took to court
  6 automobile makers
• Climate border tax adjustment for products
  from countries with no emissions caps
• Tescos new environmental initiative
  (carbon footprinting)

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Survey of NZ FB sector Scope of the survey

• Over 15 billion/year export revenue
• employs 4.29 of NZ workforce
• responsible for about 5 of NZs energy use and
  emissions
• Over 300 FB organisations contacted
• 104 responses - 30 response rate
• Goals of the survey
• Explore current environmental practices
• Review environmental requirements in export
  markets
• Identify sectors perceptions about key
  sustainability challenges

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Survey of NZ FB sector Key findings (1)

• Assumption that the sector does not have an
  impact on the environment
• Low concern about climate change and water
  management
• 3 in 4 businesses have implemented at least one
  practical environmental measure
• Only 3 in 5 businesses have joined a recognised
  NZ or overseas standard/eco-labelling scheme/code
  of practice

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Survey of NZ FB sector Key findings (2)

• Only 30 of businesses have procedures to ensure
  compliance with overseas environmental
  requirements
• Many mandatory requirements are supply chain
  driven, combine food safety and traceability,
  health, environmental and labour conditions
• Voluntary requirements become mandatory when they
  are a condition for market access i.e. FSC, MSC

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Survey of NZ FB sector Key findings (3)

• Exporters use personal research and customer
  information to seek information on better
  environmental practices
• Lack of consensus on the Clean and Green brand

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Discussion points

• Exporters with no direct links to buyers lack
  access to environmental information
• Environmental measures vs. environmental
  credentials/ production claims
• Life cycle thinking to determine supply chain
  impacts
• Low concern about climate change

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Conclusion

• Environmental requirements are increasing mostly
  as a results of CSR agenda, consumer pressure,
  fear of climate change (peak oil).
• Need to increase capacity of the export sector to
  take on practices not yet a condition for market
  access (EMS, carbon management, LCA based
  eco-labelling)
• Increased need for the export sector to
  anticipate market trends and proactively employ
  best available practices (i.e. carbon management)

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