Look beyond ‘what comes next’, James Shaw tells directors

Former Minister for Climate Change Hon James Shaw has urged directors to look past near-term risk and instead build long-term resilience. 

Speaking at a Chapter Zero NZ breakfast in Wellington this week – ‘What comes after what comes next?’– Shaw told attendees that global forces are already in motion and their impact on business, society and governance will be profound – whether we are ready or not.

He warned of rising authoritarianism, the breakdown in trust and institutions, and the collapse of multilateralism. He invited the audience to let the phrase “aggressive multipolarity” sink in, describing a world of shifting power dynamics and an increasingly uncertain future.

“Globally, trade blocs are forming again. For directors, it’s a hell of a ride right now,” he said. 

Shaw said the decisions made in boardrooms today are already being shaped by complex global and environmental pressures. He challenged boards to look beyond the next decade –not just what’s next, but what happens after what’s next?

He pointed to the opportunities currently available to boards, cautioning that seizing them would require preparation, a rejection of mediocrity, and, above all, bravery – noting that New Zealand is not immune to global disruption.

Shaw emphasised that what goes on across our oceans has greater implications for countries such as New Zealand and Australia, with the Pacific region geopolitically vulnerable and under increasing pressure.

“Southeast Asia and the Pacific are becoming theatres of great power conflict. Chinese expansionism in Taiwan and the South China Sea has potential to escalate into real conflict. Cold War-style antics are surfacing again, but Pacific nations don’t have the scale or institutions to cope like Europe did . . . that places strain on their political stability. 

“Australia and New Zealand may be asked to ‘pick a team’ – and live with the consequences.” 

Domestically, Shaw said New Zealand continues to avoid confronting difficult realities.  

“There’s an aversion to grappling with our aging population. We keep avoiding tax and investment reform, remain stuck in low-productivity sectors, and rely on commodities like agriculture and tourism.” 

This is where he sees an opportunity for business leaders to ‘actively lead’, rather than wait for consumer demand to take hold. But while it is impossible to have answers to the myriad unknowables, he outlined three areas that will be near-certain by 2035. 

1. The climate crisis will be worse. We will likely exceed 1.5° Celsius of warming. More severe weather, food and water insecurity, wildfires and mass displacement will strain global systems. Shaw said: “No matter which political or economic path we take, the climate will deteriorate in the short to medium term.”

2. The biodiversity crisis will deepen. More than a million species are currently at risk of extinction. Ecosystems that provide critical services – pollination, water purification, carbon sequestration – are eroding. The result is not only ecological loss, but a threat to global health, food systems, and economies.

3. Artificial intelligence will become core infrastructure. AI will increase pressure on energy and water systems, requiring vast resources and potentially delaying the phase-out of fossil fuels. Shaw projects that AI will account for 5–10% of global electricity demand by 2035 – up from just 1% today. 

Shaw argued these three forces will reshape global value chains, social expectations and the licence to operate. The question for directors is not whether these forces will affect their organisations, but whether they are preparing for them now.

To mitigate risk and build resilience, he highlighted three key investment priorities: 

• Climate mitigation and resilience
• Restoration and protection of nature
• Clean energy and water infrastructure

“Transport teaches us: if you build it, they will come. It's the same with energy. Cheap, clean energy drives GDP. But we’ve delayed investment too long. Real resilience comes from doing what matters,” he said. 

Shaw closed with a call for boards to act with authenticity and urgency. He warned that mismatches between public commitments and actual investment will be exposed – not least by technology.

AI is already reading sustainability reports and the data is flowing into evaluations, which will provide even greater transparency and accountability. 

“By investing in emissions reduction, natural capital, ecosystem services and resilient infrastructure, we can get ahead of the curve and build great businesses that meet public need,” said Shaw.