Date posted: 19/10/2018 4 min read

Transitioning to a low carbon and more sustainable economy

Reflections from government and lessons from business.

In Brief

  • The IPCC released their Special Report on Global Warming of 1.5ºC in early October
  • There is bi-partisan broad directional support for climate change initiatives in NZ
  • Government and business both have critical roles fighting climate change and building a sustainability economy

Early October saw a further flurry of activity relating to how nations and businesses will adapt to and mitigate the effects of climate change. 

The Intergovernmental Panel on Climate Change (IPCC) released their Special Report on Global Warming of 1.5ºC. The report noted that limiting global warming to 1.5 degrees would require rapid, far reaching and unprecedented changes in all aspects of society. However it also noted that there were clear benefits to people and natural ecosystems of limiting global warming to 1.5 degrees compared to 2 degrees and that this could go hand in hand with ensuring a more sustainable and equitable society. The IPCC is the UN body for assessing the science related to climate change.  

The report projects that coral reefs will decline by a further 70 to 90% with 1.5 degrees of global warming with larger losses (more than 99%) at 2 degrees. This has significant implications for Australia, with the Great Barrier Reef calculated to contribute $6.4 billion to the Australian economy and an economic, social and icon asset value of $56billion according to a 2017 Deloitte report.

New Zealand's Zero Carbon Bill

Chartered Accountants Australia and New Zealand was represented at the Climate Change and Business Conference in Auckland. The conference was focused on New Zealand’s forthcoming Zero Carbon Bill and what this new approach will mean for business and the economy.

The conference opened with a session including the Minister for Climate Change, The Hon. James Shaw and Scott Simpson, New Zealand's National Party environment spokesman. Mr Shaw referred to the IPCC's report commenting that whilst 2050 would be important, 2030 was really important as that would be the point when the world needed to bend the emissions curve. He also noted that New Zealand's stance on climate change has resulted in better international relationships, citing the example that France have dropped their objection to New Zealand negotiating with the EU.

Mr Simpson reflected that all governments are temporary and therefore it was vital 'for all of us and our grandchildren that we have a framework that is enduring'. He then confirmed that his party were in 'broad directional agreement in terms of climate change initiatives' with the government.


Minister for Climate Change, The Hon. James Shaw

Mr Simpson also expressed concern that popular opinion might currently be that nothing can be done for climate change and noted there was a need to shift thinking to understand that even small steps are positive.

The conference also followed the release of a summary of the 15,000 submissions the government had received on the Zero Carbon Bill consultation. Key themes from the submissions included 91% supporting a net zero emissions target for 2050 set in legislation now and 96% supporting the establishment of a climate change commission to advise government.

'We need carrots, sticks and tambourines to excite people on the journey'.
Chris Stark, CEO of the UK's committee on climate change

A new approach for business

The roles of business in innovation and leading the change were key themes for the conference. It was sponsored by large businesses including Westpac and IAG and supported by groups including the Institute of Directors and Business NZ.

Chris Stark, CEO of the UK's committee on climate change noted the lessons his organisation had learned over their 10 years, in particular that the costs of inaction are greater than the costs of action and that politics is the biggest barrier. Chris introduced the delegates to the concept of NIMTOO - Not in my term of office. He also noted that with few easy wins left, he was excited by the challenge of the future. In finishing, he echoed Mr Simpson's earlier reflections by stating that it wasn't just carrots and sticks that were needed to move business and society forward, but tambourines too, to excite people on the journey.

Mike Barry, director sustainable business at UK retail giant Marks and Spencer provided a video address to the conference. M&S launched their Plan A initiative in 2007 to improve their business and deliver outcomes in the most effective way. Mr Barry noted that their customers were interested in sustainability issues and doing the right thing - but that there were shades of green. M&S therefore needed to provide solutions, services and products to delight all customers. He commented that the secret to success was being 1 step ahead of the customer - 10 steps ahead and the business might lose customer engagement; keep level and the business wouldn't be leading.

Presentations from law firm, Minter Ellison’s, covered the call from global investment firm, Blackrock, for directors to have demonstrable fluency in relation to climate change and that climate change could not be dismissed as immaterial without proper consideration by the board in the first place.

Sarah Barker, Special Counsel, Melbourne

In wrapping up the conference, New Zealand's Prime Minister Jacinda Ardern explained that this would be an economic transformation, fighting climate change and building a sustainability economy. 'Transitioning is the right thing to do and also makes financial sense'. In concluding she noted that government can't do this alone, they need businesses support.

Check out the conference here

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Read the IPCC's report

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