Sustainability moves into the growth agenda

Set against a backdrop of snow-capped Swiss Alps, Montreux offered a valuable opportunity to take the pulse of where the global sustainability conversation is heading – and what that means for New Zealand.

In April, more than 600 business leaders gathered for the World Business Council for Sustainable Development’s (WBCSD) Annual Conference.  

Across the week, the conversation kept returning to business value and sustainable economic growth. Ambition still matters, but the focus is now much more practical: how economies grow, how businesses stay competitive and how value is created in a rapidly changing global context.

That framing aligns closely with the findings in the Sustainable Business Council’s recently released Driving Sustainable Growth report. It found that moving towards an innovation-driven, productivity-led economy, underpinned by affordable and plentiful renewable energy and stable policy settings, could deliver a $22 billion increase in GDP per year by 2035, rising to $33 billion by 2050. At the same time, this would reduce emissions by an additional 6% by 2035 and 22% by 2050.  

I was fortunate to present the report’s findings and analysis at the event. The response was overwhelmingly positive, with several countries signalling their interest in replicating the work within their own economies. WBCSD is also interested in exploring how it could apply the lessons of the report at the global level.  

The week covered a wide range of issues, from emissions reductions to energy, AI, adaptation, finance and investment. Across these conversations, one fundamental truth was reinforced: the environmental sustainability challenge we face remains twofold – the climate crisis coupled with the nature crisis.  

Presentations provided a stark reminder that complacency is not an option. While there are genuine reasons for encouragement, we have not yet reached the point where total emissions are declining.

UN Climate Change notes that recent country pledges are projected to lead to a 2.3°C to 2.8°C global temperature increase by 2100. While these commitments represent progress in lowering emission trajectories, they remain insufficient to meet Paris Agreement goals, requiring further action to close the massive emissions gap.  

Global warming of this magnitude is projected to cause catastrophic impacts, including fivefold increases in heatwave frequency, 99% coral reef loss, and severe food and water shortages for billions of people. Ecosystems face widespread extinctions, while irreversible tipping points, such as permafrost thaw, are expected to trigger further accelerated warming.  

Those were the facts on the table in Montreux. What was also clear was that achieving material impact requires bringing sustainability into the core of business strategy, internalising both risks and opportunities so the full weight of business decision-making, investment allocation and innovation is brought to bear.

There are examples of progress that we can take heart from. The EU has demonstrated that sustained focus can deliver meaningful emissions reductions, and countries such as China are beginning to accelerate action at scale. This momentum indicates global emissions will peak and begin to fall, but not nearly fast enough to meet the target of halving emissions by 2030.  WBCSD’s CEO Peter Bakker described this as an era of “radical change”. Four areas stood out:  

AI

There is enormous investment under way in this area, and with it significant potential to accelerate emissions reductions through productivity gains, better data and clearer insight into value-chain emissions reduction opportunities. At the same time, the energy demands of AI are substantial and those challenges must be resolved.  

Energy

Decarbonising the energy system was a major theme throughout the week. As in New Zealand, it is an acute focus internationally. The focus was on the practical policies and actions required to accelerate electrification both on the supply and demand side. Key to this are pragmatic energy roadmaps, and collaboration between government and business to execute them.  

Geopolitics

The current operating environment, characterised by instability and uncertainty, was front of mind for many leaders. But what struck me most was the pragmatism of the response. The focus was less on discussing geopolitical change, and more on how companies were adapting and responding. This included diversifying energy supply chains away from the Strait of Hormuz and accelerating decarbonisation to reduce exposure to long-term risk.

Resilience and adaptation

This is a growing priority across WBCSD dialogues. There is increasing recognition that businesses must confront the causes of climate change while also strengthening resilience to impacts that are already baked in. Discussions between the finance and insurance sectors were particularly interesting, with insurers sending a clear message: these impacts are already being felt and investment and action can no longer be postponed.  

As WBCSD’s only New Zealand-based Global Network Partner, this is the fourth event of its kind I have had the privilege to attend. Each time, it is humbling to plug into this global dialogue and see firsthand both the scale of the challenge and the pace at which global business is moving.  

New Zealand is not on the sidelines of this shift. Our actions are observed, and often emulated.  

The Montreux discussions reinforced the importance of that leadership. Sustainable economic growth is no longer a parallel agenda; it is the agenda. At SBC, we are committed to seizing the opportunity before us.  

Boards and directors need to ensure this is fully embedded into strategy, investment and decision-making.  

In a world of radical change, our future competitiveness, as well as the wellbeing of future generations, will depend on it.