The sustainability story often starts with carbon, but it doesn’t end there. It is important to consider a holistic approach when measuring the sustainability performance of businesses. However, it can be challenging to understand the role of businesses in delivering to sustainable development, especially when it’s across a whole industry. This is where the UN Sustainable Development Goals (SDGs) and the Treasury’s Living Standards Framework (LSF) come in. The global SDGs and the local LSF frameworks combined offer a way to quantify sustainability for a balanced perspective—and this is exactly what the metals sector in New Zealand has accomplished. On a mission to gain an understanding of how the local steel sector contributes to the wellbeing of New Zealand, the Sustainable Steel Council has developed a series of case studies with its members that communicates its impact. The metals sector’s contribution to the wellbeing of New Zealand is highlighted in the case study through its involvement in the construction of Air New Zealand’s Logistics building in Auckland. It captures the positive impacts of local production and manufacturing of steel across the sustainability spectrum including through economic activity, job opportunities, environmental stewardship, and focus on health and safety.
Translating the LSF and SDGs
The 17 goals of the SDGs are part of a global plan by the UN to eradicate poverty, protect the planet and people, and promote equality, diversity, and peace. The UN encourages organisations to use the SDGs to guide business activities on a global scale, while the LSF contextualises it for the New Zealand landscape. In fact, the LSF reflects the values of the SDGs in its four capital stocks that lay the foundations for future wellbeing. The four capital stocks of natural, human, social, and financial & physical wellbeing offer a holistic approach for assessing sustainability beyond just carbon, and wellbeing beyond just sustainability.
For companies without a dedicated sustainability professional or team such as small to medium sized enterprises (SMEs), it can be daunting to figure out where to start to understand the role of sustainability in their business. The role of sustainability within their wider industry or sector poses a greater challenge. The framework used for this case study comes as an aid to translate the LSF and the SDGs into practical questions that can be used in relation to tracking metrics, whether it is at an individual business or industry level. Since it doesn’t require a deep knowledge of the intricacies of the LSF or SDGs frameworks, the Steel Industry Contribution to New Zealand Case Study Framework provides SMEs with an accessible route to a better understanding of the role of local businesses for wellbeing in NZ.
New Zealand’s steel sector
The Air New Zealand logistics centre is a demonstration of the local steel sector’s potential, with all suppliers except one located within 50 kilometres of the building location. The building features optimised steel beams and a reinforced concrete foundation along with steel cladding and roofing. The steel was produced in New Zealand by New Zealand Steel and underwent fabrication locally for the products used for the building. The reinforcing was produced by Pacific Steel and fabricated by Taranaki Reinforcing. The cladding and roofing for the project was ColorSteel Maxx, produced by New Zealand Steel and fabricated by Dimond Roofing. The project involved 340 people, and supported companies that employ many more in the process with the suppliers to this project combined employing over 2000 people in New Zealand. Optimised steel beam manufacturer Steltech estimates that for every $1 spent on their products, >90c returns to domestic economy, while an imported beam would only return 5c. At first glance, a greater contribution to the stock of financial and physical wellbeing, including creating and supporting job opportunities and local businesses may seem like the only significant positive impacts of going local. However, the multi-faceted benefits extend to cover the areas of human, social and natural capital which are often cause for concern in global supply chains.
Why local matters
- There are myriad benefits to localising supply chains. In the case of NZ’s steel industry, the reasons in a nutshell are:
- Strong health and safety processes already in place in the local sector
- Workplaces that prioritise wellbeing, mental health, diversity, and inclusion
- Further opportunities for upskilling and career development
- Prioritisation of environmental health
- Transparent supply chains governed by regulations to protect the environment and labour rights
- More stability and less chance of disruptions during global crises
The Air New Zealand building project revealed several benefits in the use of local suppliers for steel products for the wellbeing of New Zealanders. Areas of social concern such as workplace safety and labour rights are easy to overlook and hard to guarantee when considering overseas supply chains, due in part to differences in workplace standards and regulatory processes. In New Zealand, local supply chains can avoid these risks altogether and transform them to areas of positive impact instead. In the case of the local steel industry’s contribution to the Air New Zealand building project, these positive impacts included strong health and safety processes, job opportunities for upskilling and further advancement, and companies actively engaged in the communities where they are based. Furthermore, all companies involved in the project met the case study framework’s criteria on staff wellness and mental health, diversity and inclusion, fuel tracking, sustainability organisation membership, and air travel tracking.
As the transgressions of global supply chains come under increasing scrutiny and face significant public backlash and media coverage over the health and wellbeing of workers, the case study captures the benefits of keeping supply chains closer to home. In particular, the safety record for the project stands out with only two lost-time injuries, a relatively small number for the scope of the project. Moreover, the manufacturers involved in the project were clear of any violations for the past five years with WorkSafe, New Zealand's primary workplace health and safety regulator, an indication of the ‘exemplary’ safety record around the project.
In addition to positive impact on work environment, the case study also found that there were significant benefits for the wider environment with over 79% of the waste generated diverted from landfill, to either go to a cleanfill or recycling facility. This resulted in less than 10 out of 44.2 tonnes of waste from the overall project ending up in landfill. Environmental stewardship was also highlighted through a commitment to use responsibly-sourced products, minimise energy and water use, and abide by New Zealand’s environmental regulations. The ongoing global pandemic has further brought the need for local supply chains to sharp relief with existing offshore supply chains severely disrupted by COVID 19. Hence, the case study is able to clearly illustrate both the contribution of the steel sector on wellbeing in New Zealand and its benefits over less transparent and often risk-laden global supply chains.
Beyond the metals sector
The Steel Industry Contribution to New Zealand Case Study Framework incorporates the LSF and SDG frameworks to create a holistic lens to assess the steel sector’s contribution to wellbeing. At a project level, these contributions are significantly positive and highlight benefits across the sustainability spectrum that are little known or misunderstood outside of the sector. Thus, the case study provides a powerful case for keeping steel supply chains as local as possible. The framework can be adapted for producers and manufacturers in other sectors to collectively advocate for a more robust economy supported by localised supply chains that consider the wellbeing of New Zealand.
This article was first published in NZ Manufacturer magazine, August 2020.