I was part of the biennial tour organised by the NZ Initiative to explore small well-run nations in search for excellent ideas to bring home and to establish the parameters of delegates capacity for alcohol, (Surprisingly low, it turns out).
The exchange is now part of a global corporate, EuroNext, and we were treated to a presentation by the Amsterdam’s CEO, René van Vlerken. Mostly it was pretty dry and it took self-control to leave my phone unmolested during his speech until he dropped this line into the conversation; “Our members now largely focus on the new ESG: Energy, Security and Geostrategy.”
That woke the audience up. Pun intended. The Dutch are famously pragmatic. A quarter of their country is below sea-level and over half is susceptible to flooding. This isn’t a nation that can afford to waste resources on ideas that don’t work, so it isn’t a surprise that the straight-talking Dutch would question the wisdom of pursuing the Environmental, Societal and Governance mantra that has proven to be a drag on commerce since it emerged two decades ago.
This is part of a wider debate; what is the role of business? In 1970 Milton Friedman famously wrote in the New York Times that an executive pursuing social responsibility would reduce returns to shareholders, raise prices to customers and lower the wages of some employees.
Social responsibility, the forerunner of ESG, was a popular way for executives to appear virtuous while spending their shareholder’s money, and that “…taken seriously would extend the scope of the political mechanism to every human activity. It does not differ from the most explicitly collectivist doctrine”.
Friedman went further, claiming that there is only one social responsibility of business “…to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”.
The Chicago University economist was campaigning against business leaders voluntarily engaging in acts of moral worthiness with other people’s resources, but today we face a more pernicious evil; state mandated virtue.
In New Zealand the most egregious example is Section 7A of the Financial Markets Conduct Act 2013 that obligates certain large firms, from AA Insurance to Z Energy to prepare climate statements and report on their greenhouse gas emissions.
It is an absurdly onerous regime that achieves nothing and yet the business community has quietly acquiesced and diligently prepares their glossy annual reports on, well, I’ve read a few and it isn’t clear what they are saying.
So. It was refreshing to hear Dame Joan Withers tear into this regime prior to her induction to the Business Hall of Fame last week. Withers, the chair of the Warehouse Group, holds a slew of important directorships and was, at one stage, chief executive of Fairfax New Zealand, predecessor to Stuff.
That woke the audience up. Pun intended. The Dutch are famously pragmatic. A quarter of their country is below sea-level and over half is susceptible to flooding. This isn’t a nation that can afford to waste resources on ideas that don’t work, so it isn’t a surprise that the straight-talking Dutch would question the wisdom of pursuing the Environmental, Societal and Governance mantra that has proven to be a drag on commerce since it emerged two decades ago.
This is part of a wider debate; what is the role of business? In 1970 Milton Friedman famously wrote in the New York Times that an executive pursuing social responsibility would reduce returns to shareholders, raise prices to customers and lower the wages of some employees.
Social responsibility, the forerunner of ESG, was a popular way for executives to appear virtuous while spending their shareholder’s money, and that “…taken seriously would extend the scope of the political mechanism to every human activity. It does not differ from the most explicitly collectivist doctrine”.
Friedman went further, claiming that there is only one social responsibility of business “…to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”.
The Chicago University economist was campaigning against business leaders voluntarily engaging in acts of moral worthiness with other people’s resources, but today we face a more pernicious evil; state mandated virtue.
In New Zealand the most egregious example is Section 7A of the Financial Markets Conduct Act 2013 that obligates certain large firms, from AA Insurance to Z Energy to prepare climate statements and report on their greenhouse gas emissions.
It is an absurdly onerous regime that achieves nothing and yet the business community has quietly acquiesced and diligently prepares their glossy annual reports on, well, I’ve read a few and it isn’t clear what they are saying.
So. It was refreshing to hear Dame Joan Withers tear into this regime prior to her induction to the Business Hall of Fame last week. Withers, the chair of the Warehouse Group, holds a slew of important directorships and was, at one stage, chief executive of Fairfax New Zealand, predecessor to Stuff.
The Warehouse Group chairperson Dame Joan Withers.
“Don’t talk to me about climate change reporting” she harrumphed to the NBR “It is taking up more director’s time than financial statements”.
And, she emphasises, not one carbon molecule less is emitted as a result of the thousands of pages these reports produce.
If you cared about carbon emissions we have the emissions trading scheme, which places a cost on carbon emissions. If Z reduced its emissions this would result in a fall in the price of carbon and someone else would emit more.
The reporting exercise achieves nothing, diverts director’s attention away from productive activity and costs the taxpayer an untold fortune in monitoring compliance.
“When you get to my age and stage,” Withers ponders, “you’re doing quite a but of reflecting”. Withers, perhaps, is implying she can afford to speak her mind, while those still ascending the slippery pole of corporate New Zealand will be more circumspect.
New Zealand is not facing the existential crisis of a rising sea swamping our farmland but we continue to decline relative to other OECD nations that we like to compare ourselves to. The Dutch earn US$64,000 annually, compared to just US$48,000for those of us in Godzone.
The climate reports are a symptom of a wider malaise. Of a bureaucratic class that do not consider the cost of a policy against the proposed benefit and a political establishment unwilling to challenge pubic servants and their progressive agendas......The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective
“Don’t talk to me about climate change reporting” she harrumphed to the NBR “It is taking up more director’s time than financial statements”.
And, she emphasises, not one carbon molecule less is emitted as a result of the thousands of pages these reports produce.
If you cared about carbon emissions we have the emissions trading scheme, which places a cost on carbon emissions. If Z reduced its emissions this would result in a fall in the price of carbon and someone else would emit more.
The reporting exercise achieves nothing, diverts director’s attention away from productive activity and costs the taxpayer an untold fortune in monitoring compliance.
“When you get to my age and stage,” Withers ponders, “you’re doing quite a but of reflecting”. Withers, perhaps, is implying she can afford to speak her mind, while those still ascending the slippery pole of corporate New Zealand will be more circumspect.
New Zealand is not facing the existential crisis of a rising sea swamping our farmland but we continue to decline relative to other OECD nations that we like to compare ourselves to. The Dutch earn US$64,000 annually, compared to just US$48,000for those of us in Godzone.
The climate reports are a symptom of a wider malaise. Of a bureaucratic class that do not consider the cost of a policy against the proposed benefit and a political establishment unwilling to challenge pubic servants and their progressive agendas......The full article is published HERE
Damien Grant is an Auckland business owner, a member of the Taxpayers’ Union and a regular opinion contributor for Stuff, writing from a libertarian perspective
4 comments:
No government, ever, has been able to solve homelessness.
However, by paying more taxes, we can change the climate.
Yeah, right.
You went all the way to Amsterdam and you bring back the startling revelation climate change is a fraud?
Then you quote a director of an organisation which was governed to complete failure. Sold for the princely sum of $1.
Omly fools failed to figure out Climate change is a fraud a decade ago.
Probably the same fools who haven't figured out climate change optics are still important for maintaining NZ s clean green competitive image.
Lucky we have a clever PM who knows a balance must be struck at the least possible cost.
Take a look at some of the NZ geology posted by Bruce Hayward on YouTube, and think about climate change.
It has always been changing and always will, no matter what humans do, so just suck it up, and enjoy the benefits of our civilization ( and this won't be the last ).
THANK YOU Dame Joan and Damien. Some of us have been saying this for years. Net zero nonsense, climate we really have no control over if the Sun ever hiccups. Build for resilience.
NZ has far more important issues.
Costs are high because we want chickens to feel good, low carbon, costly repurposed / recycled inputs, high energy costs due to low density and unreliable power, high insurance risk for location and crime, high council rates from prodigal councils who won’t be around to pay for their follies, high labour rates due to employment law, holidays and socialist kind ‘living wage’. High cost of doing business and then our exporters think they have to be carbon neutral to break into markets whose own producers aren’t carbon neutral and don’t have to transport goods across the world, so it is just a tariff disguised as virtue. Finally, should I mention the other big social problem NZ has (?) which is handing control over to a new religion of post-modern neolithic propaganda. Time and cost of vague consultation and engagement to an ethnic people group who have been given a stick to beat money out of companies who have to comply with consenting regimes and suck money out of rate-payers via councils.
Maori did not have science or economy etc. They will protest any technology or development where they aren’t in control of it (hence no wheel). Who cares who invented the things that are now common and available to all humanity who wish to participate.
And CAANZ need to get back to accounting and off the separatist DEI, Maori, Carbon, woke band wagon. Treat everyone equally and numbers dispassionately (can't get that into their biased member feedback surveys).
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