Honesty and Trade-offs: What’s needed to get to net carbon zero. A Partner Perspective from Mercury CEO, Vince Hawksworth

by Vince Hawksworth, Chief Executive at Mercury

I know from sitting with you and from looking at your reports and your communications that Mercury is moving relatively rapidly in terms of ESG, but what's your wider view events of the rest of New Zealand?  Are we moving fast enough in this country?

The shared goal of net carbon zero by 2050 requires us to head towards the electrification of [our economy] to get to 60% renewable energy – that’s a challenging task. It requires the electricity sector to do some really heavy lifting.  That needs about twice as much electricity generation as we have at this point in time, and requires tens of billions of dollars to be deployed, requiring us as a society to make some trade-offs such as when it comes to the location of assets.  For example, not everybody is a lover of wind farms or solar farm deployments.  Not everybody enjoys the idea of hydro generation in the same way that not everybody clearly thinks we should be burning any coal on this journey.

But in order to get there, we have to have honest conversations about those trade offs.  We can't sit with feet in multiple camps on this.

And I think that is right at the heart of the challenge is being transparent about all of that.  I think transparency is a great sanitizer of rumour and innuendo.

I suppose the first thing that occurs to me is what do you think our tolerance is for transparency?  How do we get those messages you’re talking about across to people in a way that facilitates effective conversation and therefore good decisions?

I don't want to simplify or pretend that's straightforward.  We know that as a community, we tend to now live on sound bites or on Facebook, Instagram, Tik Tok or other social media platforms, and some of the complexity in this is therefore just lost, because the sound bites are much more powerful.

I always try to remain positive no matter what the circumstances are that if we do things with positive intent and just try and make a little bit of a difference every day, that's a good thing for large businesses like Mercury.

We obviously report in an ESG sense.  We do our CFD disclosures.  We expect to process down the track of the nature related disclosures [TNFDs] and all of that adds to transparency, however the question is how much does that get read, other than by those who are really interested in it.

If businesses like us do a good job on the benchmarking, the business framework, that will gradually filter into more of the mainstream.

I’m interested to understand what drives you personally.  What's on your mind when it comes to sustainability?

I started my career in underground coal mines in the UK and so I'm one of the few people who can seriously say that I have worked at the coalface.  I spent 14 years working underground.  You start to think a bit about the impacts that you are having and more holistically the overall societal impact.  I was working at the time of the 1984 strike, I saw a large amount of mines closed down which, whilst that's probably good from an environmental perspective, was certainly not good from a community and society perspective.

And you start to think, well, none of that feels very sustainable.  Probably at that point in time, the sustainability word wasn't fashionable, but I got the fairness issue and I think one of the things that drives me is this concept of fairness - is everybody getting the opportunity that they deserve, are we creating the opportunity for people and the environment and how are we thinking about that.

My biggest dislike is the word “they”, because I've never been able to find out who “they” are.

People say “they” should do this or “they” should do something else.  I always think to myself, well, who's they?  What can I do?  And what can we do?

But all of that comes within the context that I'm extremely fortunate.  I've got a very well paid job and lots of choices that many people don't have, so I'm not a big believer in lecturing people.  I think we have to keep helping people understand.

I’m interested to think from the personal right through to the political. And this goes to what you're saying about “they”?  What is the right balance do you think between what government and the public sector need to do around our environment and what the private sector needs to do to help combat the degradation of nature? 

Business serves customers, which means everybody.  And so business needs to reflect, in all of the things it does, the communities in which it operates and their expectations.

So we think particularly about New Zealand and it's demographic changes, business has to reflect that change and the change in expectations.  We will see a much more multicultural society.  We will see many more Māori and Pacifica as a percentage of the population.  And businesses need to respond to that expectation both as employers, giving people fair opportunities, and also to shift to meet expectations on the environment and sustainability.  If we want to be successful, we have to get ahead of that game and we shouldn't need government to tell us.  It makes good business sense.  It's good for all business stakeholders, I think.

What governments can do is they can get policy settings right and the challenge in that is if you're going to change governments in some period between three and nine years, which is generally what we experience in New Zealand, and policy settings shift in that cycle, then what we actually do is we go backwards every time that occurs and then start to go forward again.  And so I think, governments are limited in what they can achieve.

I think I would argue that with the right policy settings, many of the primary sector issues can be worked through, so I think re the role of government, it would be a fantastic outcome if we could get a platform of consistency across the political divide, because I don't think actually there's a whole bunch of people in any political party sitting there saying we want to trash the environment.  But yet things are painted in those sorts of binary perspectives.

So I do think the more we can get that that conversation to be open and transparent the better.