New Zealand companies lag behind others in their reporting on climate change, and that's a risk to their reputation
New Zealand’s top 30 corporations do a poor job reporting on climate change compared with similar Australian and Fortune
Global 500 companies, according to our research
The fact that most big businesses in New Zealand provide limited or no information on climate change was one of the
drivers for a proposed policy
to introduce mandatory reporting of climate risk
across the financial system.
The policy’s focus on large financial institutions will have knock-on effects on the private business sector as banks
and insurers will require companies to assess their own climate risk and improve reporting.
This will create a more accurate, consistent and transparent climate change reporting infrastructure.
Corporations ignore climate change
Top businesses in New Zealand, Australia and those in the Fortune Global 500 group generally don’t report well on
climate change. Our study shows a minority report on observed or future patterns of greenhouse gas emissions (17%),
business greenhouse gas contributions (25%) or business responsibility to respond to climate change (32%) and whether
their emission reduction targets are aligned with science (14%).
We studied New Zealand’s top 30 corporations — including Fonterra, Air New Zealand, The Warehouse, Fletcher Building —
and found they use key terms such as climate change, carbon, greenhouse gas and global warming 13 times on average,
compared with an average of 48 times by Australian and Fortune Global 500 companies. The low frequency is an indication
that climate change is not a priority for New Zealand businesses.
A previous study
also shows only 5–16% of the 200 largest corporations in New Zealand report climate risks, emission-reduction targets
or climate-related initiatives in their annual reports or financial statements.
This suggests a gap between the scientific evidence and business planning and a lack of strategic alignment between
corporations’ pledges and performance.
One of the most important factors that shapes corporate action on climate change is regulatory uncertainty
. Chief executives who want to introduce measures to reduce emissions are discouraged because their efforts are not rewarded
internally or by external stakeholders.
What’s in it for businesses
Last month, New Zealand’s first national climate change risk assessment
identified ten areas that need urgent action.
The risk assessment provides an overview
of how New Zealand may be affected by climate change hazards
. The three risk areas most significant to the business sector are:
risks to the financial system from instability caused by extreme weather events and ongoing, gradual changes
risks to governments from economic costs associated with lost productivity, disaster relief expenditure and unfunded
risks of maladaptation due to practices, processes and tools that do not account for uncertainty and change over long
We rightly focus on physical and transitional risks associated with climate change for businesses, but reputational
risks are equally important.
on climate change is on the rise
, particularly among a new generation
of consumers and investors.
associated with inaction are likely to become more prominent in the future.
Public support for climate action
Our recent national survey
shows most New Zealanders support a green COVID-19 economic recovery. More than 70% agree industries receiving
substantial emergency financial assistance should be required to lower their carbon emissions.
More than half of New Zealanders say they are likely to shift to more environmentally friendly behaviours in the next 12
months, even if it costs more or is inconvenient. A majority also say they are confident people like them, working
together, can affect business and government action on climate change.
conducted by the IAG insurance company shows most New Zealanders want businesses to talk about risks climate change
poses to their business and customers. Many believe corporations are responsible for climate action.
Only ten out of 90 top corporations we analysed reported on the scientific consensus about climate change. Of the New
Zealand corporations, only 3% did so, compared to 13% of Australian companies and 17% of those among the Fortune Global
This lack of acknowledgement is a missed opportunity to instil public confidence, manage stakeholder expectations and
institutionalise corporate social responsibility.
Communicating the fact that experts agree on climate change increases public support for mitigation policies
. Businesses can reinforce this message to increase consumer support for ambitious, even costly, climate actions.
Reporting on climate risks is important but not sufficient. Traditionally, businesses have highlighted climate risks
more than their responsibilities, thereby portraying themselves as victims fighting to protect the economy.
Between 1990 and 2018, New Zealand’s net emissions increased by 57%
. The Zero Carbon Act
aims to reduce net emissions from all greenhouse gases to zero by 2050, except for methane from animals, which it aims
to reduce by 24-47% (below 2017 levels).
Communication is a commitment to act. New Zealand corporations have a long road ahead to match the “clean” image of the
country with their own communication on climate change.
, Senior Lecturer, School of Communication, Journalism and Marketing, Massey University
This article is republished from The Conversation
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