Port in focus
‘Sustainability’ is a word that has so many definitions and contexts, that its meaning often comes from how it is applied in practice. This is why MinterEllisonRuddWatts was delighted to speak with Rosie Mercer, who leads sustainability strategy and activity at Ports of Auckland.
Joining Ports of Auckland in 2013 as a Civil Infrastructure Engineer, Rosie was responsible for delivering port infrastructure projects and environmental management. Becoming Manager of Sustainable Business Improvement in December 2016, and then General Manager of Sustainability in April 2019, Rosie is now responsible for the management and delivery of the Ports of Auckland Sustainability Strategy and is well versed in the intricacies of navigating the complex roles of infrastructure owner, user, operator and maintainer.
A catalyst for change and action
Ports of Auckland’s sustainability approach was born out of necessity, says Rosie.
“We want to show that we can treat the environment in a way that allows us to sustain and operate a port within Auckland’s CBD, while leaving a better legacy for decades to come. Our social licence and sustainability focus predominantly centres around engaging better with our community and becoming a trusted and valued part of that community.”
Citing a move towards sustainable practices as a response to the costs of not doing so, Rosie says that Ports of Auckland initially set bold and ambitious targets to achieve zero emissions by 2040.
“We joined the Climate Leaders Coalition and aligned our target with science, which created an even tougher roadmap than even the original 2040 plan.
“We measured what we had, created possible pathways and a detailed financial model for the entire roadmap, including our different vehicles and emission sources. The model provided us with options that different energy transition types would give us.
“Through this process we made some significant changes to our approach, as the modelling helped us realise how financially constraining some of those options would be. One change was to our original idea to transition to zero emission technologies like hydrogen and battery early to achieve our science- based targets. However, it was simply not financially viable, so as an alternative we adopted a second-generation biofuel.”
"Our social licence and sustainability focus predominantly centres around engaging better with our community and becoming a trusted and valued part of that community."
Rosie Mercer, Ports of Auckland
These days, Rosie says that the port is part of the Sustainable Business Council Low Carbon Freight Pathway Development, with nine organisations collaborating together to develop a pathway for the freight sector to reach net zero by 2050 and halve its emissions by 2030.
“We use different tools to assess and compare projects against the marginal abatement cost, essentially looking at how many dollars we’re spending for every tonne of carbon we’re reducing. This provides a view of the efficacy of different project types and approaches.
“The process showed that it’s really important to create roadmaps with a bit of flexibility, allowing you to continually adjust your expectations based on your resource capacities, but at the same time keep momentum going.”
Long-term decisions for long-term impact
To make and sustain the right kind of change, Rosie believes that organisations need to take an integrated long-term view instead of seeking short-term gains.
“Many organisations struggle to compare near-term financial impacts with long-term value. The wellbeing viewpoint needs to develop a model for organisations so when decisions are made with a short-term view, businesses can understand the impact they will have, or the potential opportunities they will lose further down the track.
“If you spend a million dollars on sustainability initiatives, what does that translate to in terms of value over the next 10 years? The bigger question should be, what’s the cost of not doing it?
“An integrated strategy approach that includes factors like human capital, intellectual capital, social and relationship capital, plus natural capital, can help you make decisions each year. This strategy is probably one of the biggest keys to unlocking a systems approach.”
However, she says, financial barriers are ‘massive’, and incentives are needed to help organisations look longer-term.
“Until there is some driver that incentivises organisations to make these changes, most won’t be able to take that hit to their financial bottom line. Many organisations haven’t had the catalyst that drives them to change.”
How to value social impact?
Recognising that a social licence to operate is a key concept for all organisations today, Rosie says that there is groundswell across the community about what they care about, who companies employ, and the impact of their decisions on communities.
Therefore, the biggest challenge now is to define and embed structures to measure social value, and provide this data and information transparently.
“Social impact is hard to quantify, demonstrate and show a benefit vs cost ratio against. But the expectations the next generation is putting on organisations mean that if your business is not socially conscious, you run the risk of alienating really talented people who will be expecting that in the future.”
The other question Rosie poses is, how does an entity value social benefits to an entire community, and who should pay for it?
“The only way you can justify the costs involved is by taking a long-term holistic view that our role is to support the whole community getting to a point somewhere in the future that is cleaner and greener. But there’s no mandate or overarching expectations that it should be done and no pressure on businesses to do it, and that’s where the groundswell will hopefully start to have an impact.
“It will come down to creating visibility and transparency of the issues, and being able to put data in front of people because there’s no conversation if people have nothing to talk about. The new ESG reporting requirements, though a small step, will be immensely powerful as it begins to create the visibility needed and it will make people think more broadly than just financial impacts.”
The way forward? How to make decisions
Finally, Rosie comments that the lesson Ports of Auckland learnt on its sustainability journey is the need to collaborate and partner with others.
“The next level requires collaboration, where organisations will need to put aside some of their commercial drivers. It’s a big ask, but we need to find ways to collaborate, while allowing companies to remain commercially successful and competitive. This big shift requires breaking down some barriers to look at where we can work together to optimise the supply chain for everyone’s ultimate benefit.
"Until there is some driver that incentivises organisations to make these changes, most won’t be able to take that hit to their financial bottom line."
Rosie Mercer, Ports of Auckland
“For example, the carbon emissions from moving a container on a coastal ship are much lower than moving them on rail, and less again than moving it on road. If there was a shift to coastal shipping, it would remove a lot of road movements. However, in this situation maybe the coastal shipper ‘wins’ and the road freight movement ‘loses’, so how is that just and fair? You start to see the interdependencies between the social, environmental and the commercial impacts.
“One of the most important things is to agree on decision-making criteria for a more holistic stakeholder-led, systems-based approach that considers the long-term value creation – move away from short-term financial impacts.
“One thing I’ve found refreshing is that people are now starting to see sustainability as not just climate change and the environment, but it involves a social dimension as well. It has become more well-rounded as a topic, but we need data and transparency to really start making a measurable, tangible and impactful process.”