Chair & Chief Executive's review
L-R: Directors Vicki Taylor, Gavan Herlihy, Chris Downs, Richard Gordon (Chief Executive), Peter Schuyt (Chair), Emily Parker, Hon John Luxton, Tania Simpson (Deputy Chair). Image - Adrienne Farr
Landcare Research exists because New Zealanders and our trading partners care about our natural environment. Whether in business, on the farm, in urban communities or in their recreation, New Zealanders want their natural environment to be healthy because it is central to the identity, liveability and future prosperity of the nation.
Repeatedly we see evidence that our trading partners value the integrity of our products; and that integrity is linked to human and environmental health. Landcare Research provides an understanding of the health of the natural environment and tools that will help protect that health and support the integrity of our exports and national brand. Therefore the value we add can be summarised as supporting ‘environmental performance with integrity’.
The people in Landcare Research work with our stakeholders in business, government and the community to make the results of our work readily accessible and useful. Our work covers a spectrum from basic science that advances knowledge, through applied science that puts knowledge to work to achieve specific outcomes, to the provision of services such as our environmental performance certification programmes.
As a Crown research institute we provide a globally unusual but advantageous model, the envy of many, in which scientists can link readily to diverse disciplines in the same organisation and also with policymakers and businesses. Success in our endeavour owes a great deal to our ability to form and lead effective teams across organisational and discipline boundaries and work towards jointly-owned goals for the benefit of New Zealand.
At the heart of our contribution is excellent science. It is notable that from 2005 to 2012 Landcare Research produced 14% of all science journal publications from CRIs and New Zealand universities in the environment/ecology subject area. We also published 24% and 15% respectively of New Zealand’s soil science and biodiversity conservation publications. The impact of Landcare Research’s publications, measured by average citations per document, was higher than for any other CRI or New Zealand university in all three research areas (Incites database). Our biodiversity /conservation publications received over twice as many citations as the global ‘average’ paper in this research area.
The advent of Core Purpose definition and Core funding (half of our total revenue is on a long-term contract with government) has enhanced the ability of Landcare Research and other CRIs to work in a much more joined-up way across the research system. It has shifted the focus from competition for funds to forging ‘best teams with shared goals’. With the coming National Science Challenges, such performance is going to be even more critical as we step up further in seeking the benefits of multidisciplinary science and innovative stakeholder engagement.
Land and water is a theme of major significance to government entities, the primary sector, industry and communities in New Zealand. This is reflected in its presence in the list of National Science Challenges. The Government’s policy emphasis has been on enhancing freshwater quality, water availability and mechanisms of allocation. Landcare Research’s contribution in 2012/13 has spanned a broad spectrum from modelling the availability of water in catchments, making information available about soils and the likely risks of nutrient loss from agricultural systems, developing tools for variable-rate irrigation, to linking models of economic development and environmental impact in support of policy development at catchment, regional and national levels. For the first time in New Zealand, a detailed empirical survey has been undertaken (by Landcare Research) on farmer behaviour to inform land use and water quality policies.
New Zealand’s biological heritage is a second theme of major importance to the New Zealand public, primary sector and government and also the focus of a National Science Challenge. Our country’s indigenous flora and fauna are of national and global significance and a major part of Landcare Research’s work is focused on understanding these natural assets so that they can be nurtured alongside necessary economic activities for the benefit of present and future generations. Increasingly, businesses are taking a genuine interest in New Zealand’s biological heritage and recognising that economic growth and enhancement of the natural environment can be a ‘both, and’ rather than ‘either, or’. Landcare Research is at the forefront in supporting this change of mindset with strong science and valuable tools. Examples from 2012/13 include developing consistent biodiversity measurement approaches that help understand trend, impacts and risks; developing ecological restoration technologies for threatened habitats, which can contribute to offsetting of impacts; and developing innovative pest and biosecurity management tools, which help to reduce damage and risks in both indigenous and production ecosystems.
Achieving recognised certification for environmental performance is a goal of around 400 corporate customers of our carboNZeroCertTM, CEMARS® and Enviro-Mark® programmes. To enhance our service and provide further opportunities to those customers, we combined all three programmes in our wholly-owned subsidiary, renamed Enviro-Mark Solutions. We continue to see clear evidence of the value customers put on environmental performance certification and its potential to reduce risk and enhance sales and exports. The total carbon emissions footprint of the global clients under management in the CEMARS and carboNZero programmes (over 130 million tonnes carbon dioxide equivalents) now exceeds the total New Zealand annual emissions footprint (around 70 million tonnes).
Alongside our science to enhance environmental performance with integrity, Landcare Research is committed to sustainable business practice in its own operations. In our public sustainability web pages, we report extensively and comprehensively on our sustainability performance and how it integrates with our science. This year has seen notable improvements in our ‘environmental footprint’ with substantial reductions compared with recent years’ absolute levels of energy use, carbon dioxide emissions, water usage and waste to landfill. Our targets for the 2013/14 year will be to do even better. Our Guiding Philosophy, Sustainability Policy and Ethics Principles are also available on our public website.
Throughout our science, Landcare Research works with tangata whenua (the Māori people, their organisations and businesses). The inseparable relationship that Māori recognise between mankind and its natural environment is reflected in our approach to achieving national outcomes – an approach that integrates social, economic and environmental dimensions. Projects in 2012/13 have helped Auckland Council and Māori stakeholders to implement a suitable planning framework that incorporates Māori perspectives, and helped Ngāi Tūhoe to realise sustainable development opportunities (e.g. harvesting indigenous trees) resulting from their Treaty of Waitangi Settlement with the Crown. Landcare Research also joined ‘Te Kōkiri mō te Whāinga Hua o Ngā Whenua Māori’, a new initiative to raise productivity of Māori land, which is the private sector’s response to the Māori Economic Development strategy ‘He Kai kei aku ringa’, produced by the Māori Economic Development taskforce.
During 2012/13 we have actively promoted a special national collaboration opportunity, the Productive Land Innovation Cluster that is focused on five partners at Lincoln. This was launched by the Science and Innovation Minister Steven Joyce and the Primary Industries Minister Nathan Guy in April. The cluster is founded on a shared vision to increase the value obtained from the land while enhancing environmental quality. This is an important opportunity to share facilities and resources in the interests of building sector capability, coordinating science and enhancing its uptake through close involvement with users in public and private sectors.
Working closely with our stakeholders is critical to our effectiveness. Therefore we are pleased that a stakeholder perception survey conducted for MBIE has returned positive results once again – 95% of respondents had adopted knowledge or technology from Landcare Research since 2010 and 92% were satisfied with that experience; 85% had confidence that Landcare Research has the ability to put together the most appropriate research teams and 78% were satisfied with the way Landcare Research sets its research priorities; and 91% of respondents were satisfied with the overall quality of experience of interacting with Landcare Research. Feedback is enormously valuable and points us to areas for continuous improvement, for example, in our understanding of client priorities and the availability of our staff.
Making our scientific information more readily accessible by all users and enhancing the ability of scientists to collaborate through sharing data and accessing computing ‘grunt’ have long been drivers for our Informatics group, established in 2006. In 2012/13 we continued to grow our usage of the National e-Science Infrastructure, which puts enormous computing capacity at the fingertips of our scientists – analyses that took days now run in minutes, bringing ‘big data’ opportunities within reach. Working with regional councils and other CRIs we grew the ability of our National Land Resource Centre to make information from multiple organisations available through a single portal. We increased coverage of S-Map Online (a web-accessed repository of soils information) and have begun trials to link it to the widely used OVERSEER® model for farm nutrient management. We also started development with Antarctica New Zealand of a web portal and research collaboration resource for use by all Antarctic Treaty partners.
Our financial performance in 2012/13 reflected responsiveness to tight financial conditions and changing science needs in our business environment. Our group revenue of $55.6m was $3.7m (excluding Sirtrack) less than in the previous year. We held costs at $2.5m less than the previous year and incurred $753k restructuring costs in better positioning the company for changing science needs. Seventeen (full-time equivalent) redundancies across science and support roles reflected both a deliberate reduction of capacity in certain science areas and also a drive for increased efficiency in support services. We continue to recruit and build capacity in areas of science growth, including resource economics and Māori-related science. While redundancies are regrettable and difficult for the staff, we are pleased that four of the affected scientists have stayed with us in a voluntary capacity as Research Associates. Our group return on equity of 4.1% (budget 4.2%) was reduced to 2.1% by restructuring costs. Landcare Research remains in a strong financial position with an equity ratio of 61% (56% prior year) and net gearing ratio of 0% (0% prior year).
We look forward to the new developments taking place in 2013/14 with National Science Challenges, science clusters, potential legislation for national ‘state of the environment’ reporting, strong national focus on natural resources and land and water in particular, and steady growth in support for sustainable business practices, expressed through the growth of the Sustainable Business Council, which is now a part of Business New Zealand. We will continually seek to grow the value that we add across private and public sectors as we support environmental performance with integrity as a national asset.