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Businesses need certainty to plan climate response

This week's conference for businesses thinking about their role in tackling the climate crisis was a thought-provoking and occasionally sobering experience, writes Rod Oram.

Three crystal clear themes marked the 12th Climate Change and Business Conference in Auckland this week:

- business engagement on the issues is building fast;

- most businesses have yet to work out what transformational change looks like; and

- to respond with greater ambition, speed and effectiveness they want all parties, not just the coalition Government, to give them the long-term policy certainty essential for creating a net zero carbon economy.

These themes have a long and instructive history. The first Australasian business conference on climate change was organised by the Environmental Defence Society in Auckland in 2004. Over the next few years the annual conference alternated between there and Australian cities. Most of the delegates and speakers were from science, government and NGOs with only a small proportion from the very leading edge of business.

Then in the late 2000s and early 2010s the governments on both sides of the Tasman abruptly reversed their predecessors’ nascent climate policies. Consequently, business became discouraged so the conference went into abeyance for a few years.

Soon, though, more companies began to understand their responsibility for and business opportunities from responding to climate change. EDS resumed the conference and it grew. Business delegates became the majority of attendees, particularly after the 2017 change in our government. Its high priority for the country to tackle climate change and in the process create a high value, sustainable economy has helped create momentum.

The conferences still attract a few delegates and speakers from Australia. While we have lots of knowledge to share with them, they are battling a very hostile political environment on climate change.

That, though, is only part of the story. Fifteen years ago the goal of our two countries was to align our climate change policies as closely as possible, particularly with our emissions trading schemes. The bigger view was our two economies and countries would deepen their links and grow closer.

But our two countries are now on quite different and increasingly divergent journeys economically, politically, and culturally. On climate and other issues we look more widely for more compatible partners.

The profile of the conference’s business delegates has also changed. There are more of them, and from a far greater array of sectors. A decade ago they were mainly fossil fuel users who were the first to be drawn into the ETS. These days every company can gain from being on the journey to a net zero carbon, sustainable economy. Cleaner technologies, greater efficiencies, new technologies, products and service and greater staff, supplier, stakeholder and consumer engagement are some of the main benefits.

These matters, though, are still not fully realised or mainstream yet even in committed companies, judging by a poll of delegates at this year’s conference. Here are some of the key questions and answers:

- Who champions the effort in your organisation to reduce its climate impact? A specific team, said 36 percent; everyone in our organisation, 23 percent; senior leadership team, 21 percent; just me, 11 percent; and governance 4 percent. The last response is a worry. The fiduciary responsibility to respond adequately to climate change is absolutely a core board issue, speakers emphasised at an Institute of Directors’ breakfast at the conference.

- Where is your organisation at on its emissions reduction journey? About half the respondents were actively engaged; but 34 percent said they knew their emissions but hadn’t set reduction targets; and 19 percent said they were interested but didn’t know where to start. The main focuses for reductions ranged in order from transport as the biggest, to energy, supply chain and waste.

- How do the senior leaders in your organisation feel about climate change? Informed, said 45 percent; empowered, 19 per cent; worried, 15 percent; indifferent, 11 percent; and isolated, 4 percent.

- What are the barriers preventing your organisation from being more proactive around climate change? Capacity with the organisation, said 30 percent; clarity over best approach, 29 percent; cost of implementation, 23 percent; and hard to measure progress, 9 percent.

Reflecting the strong appetite of delegates to share their knowledge and learn from others, more than half the conference was committed to workshops and breakout sessions on business disciplines, challenges and opportunities across a wider range of sectors.

The one on the finance sector was the best attended by far. Early efforts are underway here and overseas to increase financing for clean energy and technologies, and to cut it for those detrimental to the climate and sustainability. This recent New Yorker article is a good guide to how many banks and other financial intermediaries around the world are still deeply committed to fossil fuel companies.

Canada, the UK and some other countries have delivered reports and policy proposals on sustainable finance in the past couple of years. The first New Zealand report is due at the end of this month. So far, we’ve had only a few green finance initiatives but the appetite for them is growing.

Diet and climate

The session on diet and climate was another one wrestling with our responses to a complex global sustainability issue. The twin imperatives of providing more and better nutrition but in ways less damaging to climate and ecosystems were laid out by Professor Alistair Woodward of Auckland University’s School of Population Health. He is a long-term contributor to numerous UN climate assessments.

In reply, Dr Jeremy Hill, chief science and technology officer of Fonterra, and Fiona Windle, head of nutrition at Beef+Lamb, said their sectors were vital sources of nutrition, were improving their environmental performance and would continue to have strong demand for their products. But neither was prepared to embrace climate as the over-riding issue.

However, Kiri Hannifin, head of corporate affairs and sustainability at Countdown, presented data showing how fast its customers were switching away from red meat and dairy products to other foods. Interestingly, high price is the top cause for their switch away from red meat, followed by health and environmental reasons.

That raises a number of crucial questions. Are our meat and dairy companies underestimating these significant shifts in diet and consumer drivers here and abroad? Are they over-estimating the appeal of their products? The single best piece of long-form journalism I’ve read to date on these issues is this one.

Therefore, could meat and dairy farmers and processors here lose the social licence to operate more quickly than they lose their customers abroad?

Conversely, would they win strong endorsement from people here and abroad if they enthusiastically embraced the challenge of food that was healthy for people and for the planet?

As frequent readers of this column know, I believe the answers to all those questions are ‘yes’.

National fails to convince

Scott Simpson, the National Party’s climate spokesman, offered the conference the completely opposite view. He argued, for example, that there was nothing farmers could do to cut their animal emissions other than to cut stock numbers.

I pointed out to him lamb and dairy farmers have improved the methane efficiency of their animals by 1 percent a year for the past 25 years. So all they have to do is to keep up the same gentle rate of improvement for the next 30 years and they will easily hit the 2050 target for reducing methane, a very potent greenhouse gas, the Government is proposing.

Judging by questions and comments ...  he failed to convince them National was serious about the climate crisis.

Should we want more evidence of the myriad opportunities for our farmers to join the rest of us in the battle against climate change, there are many sources such as the recent report on farming from our Interim Climate Change Committee.

He told the audience that National’s top priority was a much smaller methane reduction target than the Government was proposing in its Zero Carbon Bill.

“We will work with the Government…but we need compromise on both sides.” He added: “it was not our job to panel beat the bill.” Instead, it was up to the Government to produce a bill that would attract wide support.

Judging by questions and comments some members of the audience made on the conference app and in conversations during the event, he failed to convince them National was serious about the climate crisis. It seemed improbable National would strongly support the action we urgently need to address the climate crisis, or give strong bipartisan support to the climate legislation business and civil society are demanding to help guide their determined efforts.

In contrast, Climate Change Minister James Shaw said the Government will pass the Zero Carbon legislation by early December; it will push through substantial changes to the ETS to make it an effective process for setting the price of carbon in New Zealand; and it had responded to the Productivity Commission’s very comprehensive report on our transition to a low emissions economy. This paper, released in July, outlines how it has accepted all but one of the Commission’s 77 recommendations and has plans underway, or in preparation for all of them.

For her part, Prime Minister Jacinda Ardern recapped her recent announcement at the UN of New Zealand’s work underway with some countries on issues such as achieving free trade in goods, technologies and services that help combat climate change and on pushing back against fossil fuel subsidies. She also said that Labour’s coalition agreement with NZ First will ensure the Government can act effectively on climate legislation.

The most sobering contribution to the conference came from Sir Jonathon Porritt, a leading UK climate and sustainability expert whose organisation, Forum for the Future, is working with a number of major NZ corporates on their climate responses.

At a breakfast hosted by the Aotearoa Circle he said some dozen major reports from the UN and other organisations over the past year “dispel our last illusions that we have a reasonable, if not a lot, of time” to respond to the climate crisis.

“So, I hope we use our own authenticity to encourage more radical change.”

Disclosure: I was MC of the conference

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