Protecting New Zealand’s competitive advantage

New Zealand boards and companies need to understand the raft of new regulations and changes to trade measures and agreements that are happening overseas and the direct and indirect impacts of environmental, social and governance related (ESG) obligations on our businesses and key trading partners.

The Aotearoa Circle with Chapman Tripp have produced Protecting New Zealand’s Competitive Advantage, a comprehensive guide to the challenges and opportunities global-facing businesses – including exporters, companies with international investors and those that rely on international supply chains – will increasingly encounter in maintaining their competitive edge on the global stage.

It highlights the fast-evolving global landscape of ESG reporting obligations, particularly in terms of climate and sustainability disclosure requirements and emerging trade measures that relate to climate change.

As the climate-related disclosure (CRD) regime continues to expand globally – according to the Taskforce on Climate-related Financial Disclosures currently 60% of world GDP is now subject to mandatory disclosures – there will be wide-ranging repercussions for New Zealand businesses.

For New Zealand export businesses, currently 80% of exports by value go to markets that have mandatory ESG reporting either in place or proposed. The report highlights the interconnectedness of environmental and social factors in shaping New Zealand's competitiveness and the need for businesses to be well positioned to respond.

There are three case studies of how these changes are already affecting companies. These highlight the interconnectedness of global markets and the need for New Zealand businesses to be aware of potential impacts and for businesses of all sizes to get their reporting right to ensure ongoing access to markets.

One of the underlying themes of the report is the importance of sustainability in preserving New Zealand's competitive advantage. With increasing regulation and consumer demand for environmentally sustainable products, businesses need to be proactive and identify opportunities for innovation and collaboration.