A baseline of climate knowledge
The vast majority of New Zealand boards are integrating climate considerations into their strategies, according to the Chapter Zero New Zealand Climate Governance Pulse Survey 2023.
It found 83% of respondents discussed climate in relation to organisational strategy and that governance-level thinking is beginning to translate into action, with 50% of respondents having measured their emissions, and 48% having set emissions reduction targets.
Chapter Zero NZ, which is hosted by the Institute of Directors (IoD), undertook the Pulse Survey, in partnership with The Ākina Foundation. It is the first of its kind in Aotearoa New Zealand and future surveys will help reveal trends in climate governance strategy and action, says IoD Chief Executive Kirsten (KP) Patterson.
“While the results are based on a small sample, 101 respondents, it provides a baseline against which to measure climate governance in the future,” Patterson says.
“And the results are very much in line with the climate responses in our wider-reaching 2022 Director Sentiment Survey.”
Directors are closely watching, and learning from, the actions of other organisations according to 74% of respondents. However, action is currently focused on measurement rather than long-term climate mitigation or adaptation.
Time and resources were identified as the biggest barriers to action, with 44% noting it was a huge task to introduce climate governance on top of day-to-day pressures.
“Despite restrictions on resourcing, there is widespread awareness in the governance community that the risks and opportunities of climate change are real,” Patterson says.
“Fifty percent of respondents are concerned about the operational impacts of climate change, such as damage to facilities or workforce disruption. The second highest concern is increased insurance costs and a lack of insurance availability (38%). Other top concerns included the cost of climate change mitigation versus the perceived benefits (28%) and disruption to supply chains (23%).”
Respondents cited both organisational benefits and societal benefits from climate action. Improved resilience and longevity in business operations is perceived to be the main benefit, cited by 49%. The next greatest benefit is being able to make a measureable impact on emissions reductions, cited by 39%.
Governance approaches
Of the directors surveyed, 18% said their boards were considering climate change knowledge and/or expertise when appointing new directors. However, nearly half (47%) considered climate change was the responsibility of the whole board.
Eighteen percent had established a specialised committee, subcommittee or taskforce while 14% had delegated climate to the Audit and Risk Committee.
Despite the high level or awareness of the importance of climate governance, only 19% have climate change as a standing agenda item.
The majority of respondents are not currently undertaking climate-related reporting (66%).
However, 18% of respondents said their organisations had produced voluntary reporting against Taskforce on Climate Related Financial Disclosures FD guidelines. Another 7% of respondents were voluntarily reporting against another standard such as Toitū, B Corporation certification, ISO 14064 (Greenhouse Gases Package) or the European Sustainability Reporting Standards.
From 2023, more than 200 of New Zealand’s large financial institutions will be required to report on climate change risks and activities under the climate-related disclosures regime published by the External Reporting Board (XRB). However, most organisations are not currently required to report.
