- Leading the charge
Abby Foote, steering committee member for Chapter Zero at the Institute of Directors New Zealand delivered the opening address at Carbon Crunch in Auckland.
Approaching the 10-year anniversary of the Paris Agreement, the urgency to limit global warming to 1.5°C has never been more critical. Global emissions need to fall by 9% annually until 2030 to keep that goal alive, yet in 2023 they rose by 1%1. In New Zealand, the government's latest emission plan shows we are not on track to meet our 2050 climate targets.
A 2050 scenario recently released by the transport sector in New Zealand paints a grim picture of a possible future. Extreme weather events will overwhelm local networks, insurers will retreat from parts of the roading network, crime including fuel theft will hamper transport choices and international tourism will decline due to concerns about climate stranding. A further scenario out to 2100 describes a world that few of us would recognise.
These scenarios reflect a policy approach based on adaptation and economic growth imperatives. It reveals the impact of an approach where NZ doesn’t feel it can take the risk to decarbonise ahead of major markets. Where the persistent cost of living pressures temper the social, and political will to pay the higher price of transitioning away from fossil fuels. Effectively, these scenarios are a continuation of our current path.
In this context, climate is an imperative for leaders. Climate change and the transition to a low-emissions, climate-resilient economy is already having significant and disruptive implications for business competitiveness, viability, and shareholder value. Leaders, whether directors, boards, executives, or politicians, have both the responsibility and the opportunity to drive action and change.
Key reasons why climate has become a leadership issue include risk management in the face of significant physical and transition related risks, compliance with stricter regulations both locally and in export markets, strategic opportunities for gain from leading the transition, and increasing stakeholder expectations.
Integrating climate into organisational strategy and structures is now critical. And yet, climate governance is probably the most significant challenge that boards and other governance groups have ever faced. The long-term nature, complexity and pace of change can be overwhelming but that can’t become an excuse for inaction.
To achieve the goal of long-term resilience and climate competitiveness of our economy leaders need to make commitments, sending clear messages to our organisations that emissions reduction is important. We must embed low-carbon thinking into our organisations and across our supply chains, empowering collaboration to find ways around the challenges. The key to this is leadership.
