Stark climate warning to NZ business leaders
Environmentalist aghast at level of ‘carbon illiteracy’ on boards
Business leaders in New Zealand have been warned the climate emergency will be “bad, really bad or cataclysmically bad” for the planet.
Sir Jonathon Porritt, co-founder of Forum for the Future, says that the impact of climate change had “an unfolding permanency” and said he was perturbed by the level of “carbon illiteracy” on New Zealand boards.
“Just not enough people on boards of directors know enough, have sufficient confidence in their understanding of the science to allow them to do the job that they are meant to be doing on behalf of the people who are investing,” he told a Chapter Zero NZ event.
Porritt, who travelled to this country from Britain, also chaired an Air NZ Sustainability Panel session with the airline’s board this week.
A survey by the Institute of Directors found that climate change was well down the list among respondents of the biggest impediments to national economic performance.
Labour quality and capability was top at 55 per cent, followed by supply chain disruption and immigration policy. Climate change ranked eleventh at 10.2 per cent. It filled the same spot when directors were asked about the biggest single risk facing their organisation.
Chapter Zero steering committee chairwoman Dame Therese Walsh said there were still a lot of people who don’t believe in the threat of climate change, don’t understand it or don’t know what to do about it.
“That’s probably not many of the people in this room,” she said. “This is a coalition of the willing,” she said of the 300 at the event.
Porritt said the equation facing humanity was simple, according to scientists.
To make sure that people had 50 per cent chance of retaining that “safe operating space” scientists believed around 400 billion tons of CO could be emitted.
“Then the next most important statistic is that every year we are emitting around between 42 and 43 billion tons of CO a year. That’s where this [decade’s] story comes,” said Porritt, who has been advising on sustainable development since the mid-1990s.
Financial reporting rule changes will require climate-related disclosures for around 200 businesses and other entities from next year, a move he said was a positive one for this country.
However, this needed to be matched with new thinking throughout organisations.
“Now we have to be a little bit careful because it’s a simple instrument and it is a downstream instrument. It is mandated disclosures not yet mandating changed behaviour upstream,” he said.
There should be no assumption that downstream disclosures automatically change upstream behaviour.
While he and Walsh complimented Climate Change Minister James Shaw who was at the event, Porritt said most politicians around the world have to be “dragged kicking and screaming” to engage properly with climate science.
They were strong on rhetoric but weak on understanding the science.
Mandatory reporting here and in some other countries under the Task Force on Climate Related Disclosures (TCFD) would be the biggest accelerator of carbon literacy in business, but there was a caveat he described as an emerging phenomenon of the “tree hugger nonexecutive director”.
Executive search teams were frantically scouring their contacts for a new generation of directors who could be wheeled on to boards in order to be the “go-to resident tree hugger”.
“Trust me, that is no viable strategy. Under TCFD the majority, if not all directors on boards of directors are going to have to step up. They’re going to have to gain a proper understanding, proper climate literacy,” he said.
“And the good news here today is the Chapter Zero and the Institute of Directors are in the pole position to help to enable that climate literacy to become embedded here in New Zealand.”
Another panellist, Australian nonexecutive director and sustainability adviser Sam Mostyn, said in the last 12 to 18 months boards had got very interested in the physics of climate science; seen in droughts, bushfires, f l oods, heat extremes, hail and wind.
Directors had a strong fiduciary duty to account for their company’s ability to deal with its climate risks and its climate action.
Earlier Porritt told the Weekend Herald it was important to travel to some events to be able to work effectively.
This was emphasised by the difficulties of working via screens during the pandemic.
The airline sustainability panel (set up under former chief executive Christopher Luxon around seven years ago) was a “challenging, critical friend” to the board and executives during an all-day session this week.
“You can’t do that on screen. So for everybody on the panel this personal contact is actually a critical part of chemistry that makes advisory panels work.”
He said the benefits for developing sustainable aviation outweighed concerns about the impact of his flight on carbon emissions. Others among the Green Party, of which he is still a member, and environmentalists were hostile towards industries such as aviation, which accounts for about 3 per cent of total greenhouse gas emissions.
Porritt said he wouldn’t do the work if he thought he couldn’t make a difference. “I am not guilt stricken, I am not sitting around here in New Zealand thinking ‘oh my God, I shouldn’t be here’.”