The New Zealand Government adopted its first Emissions Reductions Plan in May 2022. This statutory document, required under the Climate Change Response Act, will focus on all sectors across the country. The main aim of the plan is to reduce New Zealand’s GHG emissions to help achieve net zero CO2 by 2050 domestically and contribute to the global effort to limit temperature rise to 1.5˚C. This comprehensive and ambitious plan sets out carbon budgets, numerous targets, and many actions out to 2035 across all sectors of the economy.
"The transition to a low-emissions economy is a significant opportunity to improve our economic prosperity, lower the cost of living, restore nature, address inequality and improve living standards for all New Zealanders. Climate action is an investment in higher-paying jobs, more productive businesses and resilient supply chains."
The plan aims to reduce long-lived greenhouse gas emissions to net-zero and biogenic methane emissions to 24-47% below 2017 levels by 2050. It’s designed to build off steps that have already been put into effect, including
- Passing the Climate Change Response (Zero-Carbon) Amendment Act in 2019
- Major reforms to the New Zealand Emissions Trading Scheme
- The end of new offshore fossil fuel exploration
- Putting the public sector on the path to carbon neutrality by 2025
In terms of how the Emissions Reduction Plan is going to be implemented, the draft national adaptation plan will focus on three key areas, which are still subject to refinement:
- Focus area one: Reform institutions to be fit for a changing climate.
- Focus area two: Provide data, information and guidance to enable everyone to assess and reduce their own climate risks.
- Focus area three: Embed climate resilience across government strategies and policies.
And while some critics point out that much of the Emissions Reduction Plan sets merely further plans and “plans to have a plan” and specific policies are yet to be developed, a number of concrete reforms will be implemented, such as introducing a world-first climate reporting legislation and action. And to accelerate industrial decarbonization, New Zealand’s NZ$69 million Government Investment in Decarbonising Industry (GIDI) fund will, for instance, benefit from an additional NZ$680 million, which represents a ten-fold increase. For some industries, such as transport, energy or agriculture the Emissions Reduction Plan may mean a complete shift in gears.
Climate Change Response Act 2022 Amendment
Looking at New Zealand’s GHG reduction plans, it is also important to note the recent amendment to the Climate Change Response Act 2002, which states that all farms must have systems in place to report on emissions by the end of 2022. This may not be surprising given the country has consistently set very progressive legislation. However, with such a large proportion of its land being farmland and agriculture being a major contributor to the economy this certainly is a very meaningful measure. All agricultural businesses will be affected and will have to ensure they have reporting systems in place by the end of the year.
Australia Commits to a More Ambitious Greenhouse Gas Reduction Target
Meanwhile, Australian Prime Minister Anthony Albanese has followed through on his election promise and the new government formally committed to a more ambitious GHG reduction target of 43% below 2005 levels by 2030. The previous government had refused to change its goal of a 26-28% reduction by the end of the decade.
Even with the new target, Australia will continue to lag behind countries like the U.K., the U.S. and the European Union but it will get closer to countries like Japan, South Korea and Canada. Critics argue that the new target is still insufficient when it comes to meeting international responsibilities under the Paris agreement. A reduction of around 65-75 percent by 2030 and bringing the net-zero date forward is what really is needed to respond to the significant impacts of climate change the country is already facing.
Still, even critics agree that this is definitely a step in the right direction. The bill, which has officially passed parliament and is soon to become law, will require the minister for climate change to report annually to parliament on the progress of meeting these targets.
And while many questions remain unanswered, particularly with regard to the exact changes that need to take place to drive these reductions, the signal to the business and domestic community is very clear: the government is serious about the new reduction target and we must act now.
How EcoVadis Can Help Your Business Prepare
EcoVadis’ ratings and intelligence solutions, and particularly the Carbon Action Module can effectively support your company in working toward the new carbon budgets and reporting on your emissions.
Utilizing a uniquely holistic assessment methodology, distinct in its capacity to account for the correlationality of adverse social and environmental impacts, EcoVadis evaluates sustainability performance across four themes – 1) Environment, 2) Labor and Human Rights 3) Ethics; and 4) Sustainable Procurement – and provides an overall rating that is weighted according to the specificities of a company’s size, location and industry.
EcoVadis’ range of ratings and intelligence solutions are already helping companies of all sizes to achieve tangible progress on emissions reporting and reduction, not least by harnessing the tools embedded in the Carbon Action Module.
What is the Carbon Action Module?
The EcoVadis Carbon Action Module empowers sustainable procurement and climate change leaders with insights on supplier GHG/carbon management practices. It also provides a toolkit to prioritize, engage and drive emissions reductions to meet decarbonization goals.
At the heart of the solution are carbon scorecards: These detailed assessments enable customers to quickly gauge the maturity of their GHG management systems and identify opportunities to improve their performance. Our customers also use carbon scorecards to monitor the performance of their trading partners, as they embark together on a decarbonization journey.
Learn more about how the Carbon Action Module is helping companies drive positive, sustainable impact at scale in the EcoVadis Network Impact Report.
To support disclosure and capacity building, we have further developed a set of tools for those getting started on the decarbonization journey. For example, we embedded a simple carbon calculator to help companies accurately quantify their emissions and introduced a dedicated GHG management module in our new e-learning platform, the EcoVadis Academy.
The Carbon Action Module, thus, provides companies with a robust framework to drive emissions reduction practices at scale, generating positive impact for the planet and society.
The data accrued under EcoVadis’ Environment theme can function to “future proof” due diligence capacity against increased regulatory scrutiny going forward, while sparing suppliers the undue burden of completing multiple generic self-assessment surveys.
Plus, EcoVadis Scorecards provide suppliers with targeted corrective action plans (CAPs), tailored training appropriate to the organization’s maturity on ESG topics (including labor and human rights issues) and a CAP-Monitoring-Service to track performance improvement. This feature thus provides buying companies with a straightforward means of fulfilling their forthcoming obligation to report on and track the implementation of measures intended to address adverse labor or human rights impacts in the supply base.
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