Growing interest in agriculture
The November Director Lens webinar explored the outcomes of COP27 with Dentons' Global Advisor Jennifer Walmsley and Kate Wilson Butler, Head of Climate Action from the Sustainable Business Council. Directors Scott St John, Fonterra, and Rob Hewett, Silver Fern Farms, presented a director’s perspective on integrating climate considerations into strategy in the agriculture sector.
An agreement to fund reparations that nobody has underwritten, and no concrete plans to cut fossil fuel production.
While the headline outcomes of the recent COP27 climate conference in Egypt didn’t appear to move the climate action dial much, a new focus on farming and food at the event is something New Zealand directors should factor into their thinking.
For the first time, there was a dedicated day focused on farming, food and agriculture's role in the climate crisis. The discussion was based around ways to achieve a just transition that supports farmers as they reduce their emissions and transition to more sustainable practices.
Around half of New Zealand's total emissions comes from agriculture. Reducing these emissions is fundamental to achieving our net zero greenhouse gas emissions target by 2050.
The governance implications for New Zealand were discussed by a panel of experts in a Chapter Zero webinar “Director lens on COP27”. Speaking at the event, leading directors said that increasing the engagement of New Zealand’s primary sector boards – and meeting the concerns of farmers – was likely to deliver more effective climate action in Aotearoa than what came out of the Egypt event.
Rob Hewett CFInstD, sits on numerous primary sector boards and is chair of Silver Fern Farms and Farmlands.
He says a memorandum signed by the Government and a group of large Kiwi agricultural companies in October may give a boost to finding practical ways to manage climate transition in the rural sector.
The memorandum establishes a partnership, under the auspices of the Centre for Climate Action on Agricultural Emissions, to develop tools and technologies that the sector will need in order to operate in the future zero-carbon economy.
“The issue is a little bit pointed for us because land-use change is real for us,” Hewett said.
Scott St John CFInstD chairs Fisher and Paykel Healthcare and sits on a number of boards including ANZ Fonterra and Mercury Energy. He noted that New Zealand needs new ideas and technologies because we are already one of the lowest carbon suppliers of dairy products in the world.
“We need to be recognised as a global leader and to grow partnerships and innovation with our customers around the world to help meet our collective climate goals. We are at the frontier,” St John said.
Both noted the importance of changing customer expectations globally, which include the expectations of final consumers and of business partners who want to understand the climate impacts of New Zealand companies in the supply chain.
Hewett said that for Silver Fern Farms, the new global imperative to understand, and influence, supply chains was replicated in relationships with the company’s local suppliers.
“And it’s similar for Scott [at Fonterra]. How do we take our suppliers along on that journey? Right now there is a lot of heat in this discussion. Google ‘groundswell’ if you want to see a bunch of farmers that are angry about this.”
COP27 concluded with calls for greater international cooperation and acknowledgement that structural change to the global economy is needed to meet the targets set in the Paris Agreement, restrict global warming to 1.5 degrees by the end of this century and, hopefully, avoid catastrophic climate shifts.
But Jennifer Walmsley, a partner at Denton's Global Advisors, who attended the conference, said there was growing recognition that the world may not be moving fast enough.
“I was certainly struck by the fact that there are organisations that are now starting to accept that actually, 1.5 degrees is likely not to be feasible,” Walmsley said.
However, the fact that agriculture was now on the COP agenda was positive, she said.
“Agriculture is responsible for a huge percentage of global emissions. How do we move to a more sustainable food system, and then carbon removal solutions? I think, previously, that hasn't really been seen as a legitimate conversation.”
Adaptation in agriculture reflected one of the underlying themes of COP27, which was how societies will operate in a world affected by climate change, as opposed to avoiding the impacts of climate change.
“We saw at COP27 adaptation really coming to the fore as part of the conversation for business, which is part and parcel of looking beyond 1.5 degrees,” said Kate Wilson Butler, Head of Climate Action at the Sustainable Business Council.
- Jennifer Walmsley (Dentons Global Advisors) slides
- Kate Wilson Butler (Sustainable Business Council) slides
This briefing highlights the key outcomes from this year’s UN Conference of the Parties meeting in Egypt, COP27, how they may affect you as a non-executive board director, and the resulting conversations you should have in the boardroom to drive action and build resilience. Produced by the Climate Governance Initiative.
