There is an increasing sense of urgency around climate change as Aotearoa continues to strive to meet international obligations to decarbonise its economy.
It is no secret that the transition to a low emission economy is a significant opportunity to not only improve our economic prosperity but restore our natural environment.
A steady stream of change ahead
2022 has seen the publishing of the National Adaptation Plan and the Emissions Reduction Plan. While both plans provide high level guidance and help focus attention on what needs to be done, the devil is always in the detail; understandably, these plans largely leave that detail for subsequent processes. Achieving the objectives of both plans will require clear leadership, a complex work programme (given the sheer number of actions outlined in the plans) and considerable financial commitment.
A key aspect will be delivering significant additional renewable energy generation capacity. Given the complex interface between environmental and market regulation, combined with the tight supply of raw materials central to their construction, this could be easier said than done.
While there is no shortage of interesting change ahead, time will tell how successful businesses are at keeping pace. What we do know is that when it comes to navigating complex and fast-moving change, working with a team of climate change and sustainability experts can help businesses achieve their environmental goals.
What to watch for in 2023
2023 shapes as a pivotal year for businesses in their drive to set, if not reach, their climate change and sustainability goals. We anticipate several likely themes to continue and emerge.
- Sustainable finance products - We see a clear shift towards financing structures that incorporate environmental considerations and reflect their sustainability ambitions. The sustainability linked loan market continues to increase, and we are seeing borrowers in an increasingly wide range of industries implementing them. More recently, we have seen sustainability linked loans becoming more available in the mid-market and SME space, with several banks developing sustainability linked loan products for businesses.
- The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 - While it has been signalled that the new climate-related disclosure obligations will be staggered, and that businesses will be given time to increase the quality and quantity of their disclosures, they still represent a steep learning curve. Businesses should use time next year to take a 'learn by doing' approach. The key will be to embrace the 'doing' and recognise the real and present impacts of climate change.
- Climate-based litigation - In the last few years, we have seen international courts handing down climate decisions in both a public and private context, with varying degrees of success. For example, this year the Full Federal Court of Australia rejected the imposition of a novel duty of care by the Minister for the Environment to Australian children to avoid causing them personal injury by climate change related harm. Conversely, in 2021 the District Court in the Hague ordered Royal Dutch Shell to cut its global emissions by 45 percent by 2030.
- Renewable generation - There is an urgent need for significant levels of new (and retention of existing) renewable generation if New Zealand is to reach its climate change commitments. Businesses need renewable energy options now to enable them to decarbonise, grow (and access markets) and also to drive innovation. What renewable energy options are delivered, and when, will be interesting to see.
- Resource Management Act (RMA) amendments - The 2020 RMA amendments will soon take legal effect, such that climate change may be an issue in every planning and consenting process. As there is presently no national guidance, businesses can expect a period of considerable uncertainty and must be involved in informing the key planning processes.
- RMA reform - The Natural and Built Environment Bill (NBEB) and the associated Spatial Planning Bill were introduced on 15 November 2022. The third of the RMA reform Acts, the Climate Change Adaptation Bill (CCAB), is expected to be introduced in 2023. While the NBEB addresses climate change by identifying it as one of several outcomes, it will be interesting to see how the CCAB helps New Zealand manage the impacts of climate change. Real direction for climate change should occur first through the National Planning Framework, and then through regional spatial strategies and ultimately plans. Businesses will have to keep a careful eye on the development of these documents over the next 10 years.
Helping to lead the journey
Buddle Findlay is a leading provider of climate change and sustainability legal services. This reputation has been forged over many years, involving a broad spectrum of clients across different parts of the New Zealand economy.
Now more than ever, climate change and achieving positive environmental outcomes are increasingly important to Kiwis. With many businesses having already committed to – or are on the path to – minimising their carbon footprint.
Our experience covers carbon forestry, climate change and emissions trading, climate reporting and financial regulation, environment and resource management, renewable energy and energy efficiency, sustainable finance, and sustainable development and construction.
For more on the breadth of our team’s experience and to see how we can help your organisation, view our climate change and sustainability page.
