PIC CAP: CST Wastewater Solutions’ Managing Director Michael Bambridge who recently installed a GWE combined green energy and wastewater treatment plant for one of Australia’s major global beef processers, Oakey Beef Exports.
(But wants a solution to the gap between promise and performance)
A new study of Australiasian management attitudes towards environmental initiatives involving cleaner water and greener energy has found strongly increasing support among the people who are key to making such projects happen.
The study, commissioned by CST Wastewater Solutions, finds industry is convinced about the potential financial viability of sustainable energy and water initiatives, if sanguine about the failure rate in Australia and New Zealand so far.
The report, compiled by CST’s General Manager, Energy, Mr Andrew Boughton, is the result of 60 in-depth interviews with senior executives in industries such as food, beverage, agribusiness, processing, resources and energy, which have the greatest potential for new technologies such as wastewater-to-biogas being introduced to Australia by CST.
The report shows respondents in Production, Engineering and Sustainability (PES) management have faith in the economics of sustainability investments, with over 90% disagreeing with the proposition, which is sometimes put, that sustainability is “never likely to be profitable”.
“Yet for over 50% of end-users and two thirds of the consultants we interviewed, there is a “major gap” between the goals and outcomes of Sustainability, while nearly all end-users we interviewed in person believe there are “major shortcomings” or even “failures” in sustainable energy and water projects, particularly around financial payback.
CFOs and engineering managers were particularly sceptical of “over-cooked” sustainability claims, and of vendors using ethical leverage – urging buyers to spend for the sake of the environment while ignoring their real business needs.
The market, by contrast, feels the sustainability industry should become more cost-effective, and be sure that business gets the results that they believe they have been led to expect and have paid for, says the report.
Such healthy scepticism is sometimes justified given the number of less experienced operators moving into the business as clean water and green energy become headline corporate issues.
Too many fulsome promises have been made and accepted, possibly because they haven’t been subjected to sufficiently rigorous financial analysis using the same terms of reference for all parties. This makes it hard for those who present realistic proposals and later are left to clean up the mess created by others.
Continuing the picture of optimism towards environmental initiatives presented in the report, over 80% of respondents agree it is “a genuine investment priority” with almost 60% agreeing strongly, yet almost half feel it is at least to some extent a response to “politically correct pressure.
Over 90% of respondents believe the CFO is receptive to sustainability initiatives with a strong cost justification, though a third agree that Finance has higher investment priorities than Sustainability.
In the open comments for the survey on “major challenges” in Sustainability, a number of respondents said that raising its importance over other investment priorities was either their first or second challenge, while in the “Opportunities’ section many respondents cited business growth or new product development as their key Sustainability opportunity.
A number of PES managers candidly said that the first priority of the business was growth, in which context while environmental sustainability and energy efficiency came last – unless, as one respondent said, governmnt policies change, and then it could be a whole new ball game.
Sustainability is the “poor cousin” on the Production side. So the responses are mixed, with a tendency for production and sustainability staff to be fairly optimistic about the CFO’s approach to their proposals.
“This is in fact one of the most comprehensive reports of its type in recent times in which CFOs have been very willing to invest time to speak candidly about the subject, because they passionately feel it has been over-cooked by the supply side”.
A full copy of the report can be viewed at www.cstwastewater.com/managing-sustainable-energy-water-investments.