Chair & Chief Executive's review
Richard Gordon (Chief Executive) and Peter Schuyt (Chair).
We are very pleased to introduce our annual report. In the 2013/14 year Landcare Research has made significant progress in its science and preparation for change in the New Zealand science sector.
Developments in science
Our science and research target a material improvement in the state of New Zealand’s biodiversity; growth of New Zealand’s economy through the sustainable use of its land base; and reduced greenhouse gas emissions. Exciting strategic developments range from large data solutions for land and catchment management to techniques for working with DNA to add value and speed in border biosecurity. This report contains many examples of current advances including soil DNA biodiversity assessments; LiDAR, digital soil mapping and land form mapping at the 5-m farm scale; V-NIR for soil carbon measurements at the paddock scale; EM soil moisture sensing and other technologies to support precision irrigation. We are leaders in informatics research; this, combined with high performance computing, high throughput molecular technologies and our focus on interoperable data standards, data-sharing synergies and open access data, is driving innovation across many areas of our work.
The integrator role
Landcare Research is an integrator – across spatial scales, across sectors and between the science disciplines that focus on the environment, society and the economy. Our overarching values: Manaaki Whenua, Manaaki Tangata, integrates wellbeing of the land with prosperity of the people. Another facet of integration is the way in which we seek to work with others. We are encouraged by the great support we receive from our stakeholders. The MBIE survey provides a snapshot, as does our own staff survey, of how we are tracking with our relationships.
CRI Review
Landcare Research was one of the first three CRIs to undergo a Four-Year Rolling Review by MBIE – a very valuable external review of our performance in terms of how we manage and govern our business, rather than the quality, values and impacts of our science and research. We embrace many positive findings in the review about our direction, relationships, management of national collections and data assets and commitment to benefit to New Zealand. We are working on the need for urgency in shaping and communicating our intentions for our value proposition in our changing business environment.
Strategic direction
Landcare Research is well recognised in the global science community for the quality of its science and this attracts top quality talent. In parallel with its leadership role in the global science community, Landcare Research partners to achieve National Outcomes primarily with government, industry and Māori organisations. Our strategic direction will see Landcare Research taking its science quality, talent and partnerships forward into new national initiatives. We have contributed strongly to the development of National Science Challenges and regional science hubs – notably at Lincoln in Canterbury – and to the needs of government’s Natural Resources Sector, especially around water reforms and future environmental reporting. We are also increasing our contribution to Māori development through both wellestablished and new relationships.
National Science Challenges
During the year we took a leadership role in the new National Science Challenges, probably the biggest change in the structure of the New Zealand science sector in two decades since the creation of the CRIs. We are delighted to be hosting the New Zealand's Biological Heritage Science Challenge. The intention to collaborate in new ways across the science, government, Māori and business sectors is unparalleled – 38 organisations formally supported the bid. The goal of the Challenge is exciting: to reverse the decline of New Zealand’s biological heritage (the plants, fungi and animals valued by our society). Landcare Research staff will take some of the leadership roles and our Board will take accountability for this 10-year initiative. We look forward to contributing to other Science Challenges, especially Our Land & Water, when they are contracted.
Enviro-Mark Solutions
The greatest contribution that Landcare Research makes to the growth of New Zealand within its environmental limits is through the impacts that we achieve with our stakeholders. This is especially notable in our Enviro-Mark Solutions business, which sells the greenhouse gas certification programmes CEMARS and carboNZero, and the environmental management programme Enviro-Mark. A survey of customers and other businesses shows that the critical value we add for clients is credibility in their processes, claims and achievements. This adds to their value proposition in a business environment that is demanding more credible information in both businessto- business and business-to-customer trade. A new programme, Energy-Mark, was launched positioning customers to make audited claims about their energy efficiency. Business in the UK continues to grow and the CEMARS programme has been written into UK legislative guidance for greenhouse gas certification.
Our sustainable good practice
For the last 15 years, we at Landcare Research have strived to continually reduce the environmental footprint of our own operational activities balanced against the need to maintain our international reputation for science excellence and business viability. Performance during 2013/14 was exceptional in regards to reduced greenhouse gas emissions and reduced volume of compostable and recyclable waste inadvertently sent to landfill. We have maintained our ISO 14001 certification since 1998 and carbon neutrality since 2005/06 (with carboNZero certification since 2007); both certifications represent the highest standards that are externally verified by independent auditors. We are proud of the quality of our staff (many of whom have been recognised with awards and influential positions in New Zealand and overseas) and their high level of engagement in the organisation. Consistent with our responsibilities as a good employer, we invest in new infrastructure to support science and in fellowships and training to develop capability of our staff, including new young staff embarking on science careers. We maintain a tight focus on the best Health and Safety practices and have maintained the stringent, externally-audited standards of tertiary accreditation (the highest level) in the Accident Compensation Commission’s programme for Workplace Safety Management Practices since 2004. We report comprehensively on our performance via a dedicated section of our website.
Financial performance
In 2013/14 we generated the highest EBIT ($1.5m) and Return on Equity (10.1% before reinvestment) in recent years. This reflected our emphasis on cost efficiency and investing in growth areas, such as soils, spatial information and environmental resource economics. Our major clients have continued to keep pressure on their operating budgets, which has had a flow-on effect to our revenue, 2.5% below that for 2012/13. We were unable to realise all of the projects in our revenue pipeline, in part because of competing time demands from sector changes. Enviro-Mark Solutions enhanced its business and made a small, positive financial contribution to the parent in 2013/14. We wish to acknowledge and thank retiring directors Tania Simpson and John Luxton; and we welcome newly appointed directors Jane Taylor (Deputy Chair) and Steven Saunders.