An informal climate public private partnership

The Government’s focus on climate action in the recent Budget looked a lot like an invitation.

To my eye, it signalled a policy of collaboration with New Zealand’s business leaders – an informal Public Private Partnership, if you like – as we attempt to put our economy on a climate-friendly, sustainable footing.

The indication from the Budget is that Government wants to work with business and organisations to put in place economically and environmentally sustainable solutions to the climate crisis.

Similarly the Government’s Emissions Reduction Plan released in the days before the Budget will require collaboration between industry and regulators. It is, in some ways, a plan to create a plan rather than a roadmap. It envisages business leaders and industry bodies investigating their emissions profiles and devising ways to reduce their carbon footprints.

Directors will have a large role to play as we seek a smooth transition to a net zero-carbon economy, excluding agricultural methane, in 2050. The role of our primary sector remains the elephant in the room.

The IoD, too, has a role to play in this through our support of Chapter Zero. As the host of the New Zealand chapter of this global climate action initiative, we are pleased to have some of New Zealand’s leading directors on board, people who understand the need for action and who are passionate about finding sustainable solutions.

The Chapter Zero NZ steering committee includes directors from a wide variety of organisations across most of our major sectors, and some of our biggest emitters.

Chapter Zero offers our business leaders a chance to tap into the knowledge of their peers. It provides access to the ideas of a network of directors who are facing similar questions across different industries.

That is why the IoD is pleased to host Chapter Zero in New Zealand – it operates as a climate-specific example of what we do for directors all the time. At the IoD, we believe that it is through sharing information, knowledge and experience, that directors can better prepare themselves and their organisations for the challenges and opportunities of climate change.

Of course, climate change is not just a business issue, it is also a community issue. Both the IoD and Chapter Zero recognise that the decisions directors take will have important ramifications for all of us. That is why it is so important that directors have all the support they need to make good decisions that protect their organisations and their communities.

Big stick

Of course, the Government has a number of levers to pull to ensure businesses do take moves to reduce their carbon footprint. Regulations are already in place that require climate reporting from some of our largest corporates from early 2023. This requirement is expected to be extended to other business as reporting standards are developed.

And Minister of Climate Change Hon James Shaw has noted work is going on behind the scenes on how to use the tax system to promote the Government’s climate goals. It is likely “incentives” will be announced at some point.

Those goals, by the way, include opportunities for New Zealand businesses. The Government wants to support the development of new markets for sustainably produced goods and services and provide incentives for consumers to choose lower emissions alternatives. Alongside that, it wants to improve the resilience of our economy to a range of future shocks.

Adaptation

This Budget was a start on the road to climate adaptation. In signalling it wants to partner with business, the Government has made very clear that change is now expected to begin in earnest.

I welcome the government’s moves in the Budget to help businesses to cut emissions, and to help our producers take advantage of increasing demand for low emissions products in the marketplace.

It is going to take coordination between the public and private sectors to move the New Zealand economy in the direction that we all know it has to go.

Directors need to embrace this challenge.