“In a few decades, we will have transitioned to an economy unrecognisable in today’s standards,” says Michele Embling, Chair of the XRB.
Every business leader and Director should take note of that statement. You don’t have to move now but it should be a topic in your next strategy session.
The World Bank states today’s main economic indicators include GDP, consumption, investment and international trade. Add employment, inflation, and tax and you’ll notice the emphasis is on money and people. In the next 10+ years, carbon and the environment will have a substantial impact on our economic model.
1. Banks Are Going Green
“The financial systems are leading the transition and this is having a very strong impact” says Natalie Reeves, Sustainability Manager at Queenstown Airport.
The airport recently announced a $100M multi-bank loan that requires it to report its carbon emissions and sustainability goals. Richard Adamson, Client Director at ASB, says these are termed ‘sustainability-linked loans’.
Joanna Silver, Head of Sustainable Finance at Westpac, outlined to me the range of ‘green’ offerings in the market such as green bonds, loans made on green assets and loans that incentivise sustainable behaviour (as with Queenstown Airport). All in return for better terms.
Banks are in a game of musical chairs, racing to maximise their loan book with sustainable assets. Nobody wants to be left standing when the music stops.
2. Insurers Are Recouping Climate Event Losses
David Gibbons, Director at BMS Risk Solutions, warned me that insurance has risen well above inflation in most areas. The focus of Crombie Lockwood’s Insurance Market Update in August? Hard market conditions, rising reinsurance costs, and extreme weather events.
Insurers are going further than lifting premiums in response to weather-related payouts. They are modelling geographic areas subject to climate change impacts and conversations will get very tough. Bryce Davies, Executive Manager of Corporate Relations at IAG NZ says “carbon has been blinding us to acting on communities at risk”. Westport, Napier and South Dunedin - you have been warned.
3. Customer Demand
Fonterra’s Simon Tucker, Director of Global Sustainability, Stakeholder Affairs & Trade, says their customers are setting aggressive emissions targets. Nestle is paying a premium for low-carbon products. Matt Harcombe at Silver Fern Farms has used AI and satellite imagery to calculate on-farm sequestration. Our exporters are on notice and they’re responding.
These factors are gaining momentum and in NZ there’s $9 trillion by 2030 on offer if you view it as an opportunity. Add sustainability to your next strategy session and let GreenHalo automate as much of your carbon footprint as possible.
Chris Bailey GreenHalo Founder
GreenHalo is a carbon accounting platform and our mission is to support and grow the community of Green Angels.
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