
TL;DR: A new report urges New Zealand exporters to validate their environmental credentials to maintain competitiveness amid global scrutiny on ESG practices and climate-related disclosures affecting key markets and supply chains.
Pressures on New Zealand Exporters
A recent report emphasises the growing pressure on New Zealand exporters to verify their environmental credentials. It stresses the importance of this in maintaining the country’s competitive edge amidst global scrutiny on climate actions and environmental, social, and governance (ESG) practices.
Source and Findings
The analysis, conducted by Chapman Tripp and The Aotearoa Circle, reveals that over 60% of the global GDP is now under climate-related disclosure mandates, which are already in effect or are set to be implemented. This data was confirmed by the international Task Force on Climate-related Financial Disclosures.
Implications for NZ Exporters
The regulations impact significant markets for New Zealand exports, potentially affecting large and small businesses within supply chains. “New Zealand exporters dealing with clients under mandatory climate-related disclosure may need to provide detailed climate information and meet emission targets,” the report warns.
Broader Environmental and Social Challenges
The report discusses a complex network of mandatory regulations and voluntary commitments that address numerous environmental and social issues, including greenhouse gas emissions, deforestation, and labour standards.
Industry Responses
Prominent companies like Fonterra and Zespri have responded proactively. Fonterra has set emission reduction targets, while Zespri has improved the sustainability of its packaging. Silver Fern Farms is now producing certified grass-fed Net Carbon Zero red meat.
The Global Framework
The report highlights that 80% of New Zealand’s export value goes to markets with active or proposed mandatory ESG reporting. This includes major trade partners like the EU, USA, India, Japan, and Brazil, with others like Canada and Australia soon to follow. Compliance varies based on company size and market presence.
Expert Commentary
Nicola Swan, a partner at Chapman Tripp, stresses the importance of staying ahead in ESG reporting to safeguard New Zealand’s trade and investment flows. Vicki Watson, CEO of The Aotearoa Circle, echoes this sentiment, noting the rapid global shift towards stringent ESG reporting standards. “Seeing this all in one place highlights the trend’s permanence,” she states.
This report calls for New Zealand businesses to proactively manage ESG risks to stay competitive globally.