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

changing climate

Cerasela Stancu & Ann SmithTalking and Walking Sustainability Conference, NZSSES

February 21, 2007

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 Food&Beverage sector• Scope of the survey• Key findings - environmental export requirements• Discussion

Conclusion

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

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

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

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

• Tesco’s new environmental initiative (carbon footprinting)

Survey of NZ F&B sector Scope of the survey

• Over $15 billion/year export revenue– employs 4.29% of NZ workforce

– responsible for about 5% of NZ’s energy use and emissions

• Over 300 F&B organisations contacted

• 104 responses - 30% response rate

• Goals of the survey:– Explore current environmental practices

– Review environmental requirements in export markets

– Identify sector’s perceptions about key sustainability challenges

Survey of NZ F&B 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

Survey of NZ F&B 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

Survey of NZ F&B 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

Common export requirements

10%

15%

21%

40%

38%

38%

42%

75%

81%

10%

10%

28%

18%

33%

45%

50%

68%

73%

0%

23%

38%

38%

54%

54%

46%

77%

77%

Take-back obligations

Voluntary labelling

Voluntary standards or certification

Supplier questionnaires set bycustomer

Environmental criteria set bycustomer

Supplier audits undertaken bycustomer

Packaging specifications

Mandatory standards or certification

Mandatory labelling

Percentage of businesses

1 to 9 staff 10 to 99 staff over 100 staff

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

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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