NZ’s second emissions budget has been set: How can organisations support it?

New Zealand’s second emissions budget (for 2026-2030) has been set, and earlier this year, He Pou a Rangi (the Climate Change Commission) sought feedback on their draft advice to Government on Aotearoa’s second emissions reduction plan. Based on our feedback on the draft, Beca’s Sustainability Handprint Lead Tom Kelly gives a summary of the actions that organisations can move forward with, ahead of the Commission’s final advice to the Minister being delivered in December 2023.

These are also themes that will be covered at COP28, the annual forum and main decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC), which our CEO Amelia Linzey and Industrial Group Director Jimmy Walsh are attending as part of the first business delegation from Aotearoa. It will be a unique opportunity for Beca to support the New Zealand delegation’s commitment to achieving meaningful environmental and social outcomes for the Asia Pacific region.

With those broader goals in mind, here are some actionable insights that New Zealand organisations can move ahead with.

Understanding your impact: a path to net zero

Gaining a base level of understanding of your organisation’s impact is the first step in order to see how you can align with and support the Emissions Reduction Plan. If you’ve not yet taken this step, you may find that, once you include material emissions, you have significant Scope 3 emissions to address.

• Set science-based emission reduction targets and develop a plan to achieve those targets. In order to move forward rapidly, this is likely to mean significant changes to your organisation’s strategic direction and operating model. The good news is that by taking these actions, you will be able to align with and support any requirements under the Climate Risk Disclosure regime.
• For local government, spatial planning plays a vital role in considering how and why people move around; communities’ infrastructure needs; and what will give the best bang for buck (from a carbon perspective) while taking into account climate resilience risks. Planning for transport emissions reduction is crucial, and larger councils should have a VKT (vehicle kilometres travelled) reduction plan. Embedding climate and carbon impacts into decision-making and long-term plan investments are essential steps.
• For industry, reducing coal usage and decarbonising process heat are crucial objectives to pursue, as is adopting renewable technologies. For the energy sector specifically, there should be a key focus on developing renewable electricity supply and distribution networks. Read our earlier piece on the second emissions budget and the power and industry sector here.

The built environment

Building owners and the building industry have a significant responsibility and opportunity to drive lasting change for a decarbonised and climate-resilient buildings sector, working in collaboration with clients and communities to achieve this vision.

To enable emissions reduction, a system-wide approach to building design is essential. Consider your portfolio as a whole, while also implementing low-carbon initiatives at the individual building level. Read our earlier piece on the accelerating action in the built environment here.

• Declare your building’s energy performance as a first step towards improving it.
• Replace fossil fuel boilers with electric heat pumps.
• Optimise your building’s controls so that it operates efficiently, even when it’s only partly occupied.
• Collaborate with tenants to find ways to reduce energy demand.
• Upgrade glazing and building fabric performance to reduce heat loss and energy demand.
• Incorporate passive design into any new builds to minimise future energy needs.
• Develop and implement organisation-wide transport plans to help people make the shift from private vehicles to public transport, walking and cycling.;
• For local government, having VKT (vehicle kilometres travelled) reduction plans for urban growth centres, alongside the provision of quality medium and high-density residential development, is essential. Investment priorities should support quality urban development integrated with public transport, walking, and cycling networks. Low-carbon initiatives and mode-shift plans are needed at both the building level and city level.

Local transport

We support the development and implementation of plans that promote mode-shift through integrating public transport, walking, cycling, and quality medium to high-density residential development.

Local government entities can help make change through local interventions that are more feasible, cost-effective, and capable of generating quicker results than major infrastructure projects.

• Improve existing urban roads to make them more user-friendly for pedestrians.
• Deploy more buses with increased frequency, as well as increasing subsidies on fares.
• Depending on the specific context of the area, implement congestion charging and parking controls to discourage private vehicle use. Using international studies can help to ensure buy-in, equity and acceptance of congestion charging in the New Zealand context.
• A national behaviour change campaign would help people switch to more sustainable transport options.

Dealing with waste

We see an urgent need for a long-term waste infrastructure plan for New Zealand that ties into circular economy and bioeconomy strategies. Businesses, communities and local councils all need to engage in consultation processes. Without such a plan, local councils may develop infrastructure in silos, leading to inefficiencies and uncoordinated development.

Equity in waste management practices should not lead to significant financial impacts on ratepayers, so clear support mechanisms from the government are necessary. 

Overall, we can utilise resources more efficiently by redirecting investments and co-funding to the sectors that have higher decarbonisation barriers and longer-term emissions reduction requirements.

• Get involved in waste consultation processes, particularly in relation to the waste products that come from your industry. Your local council may lack expertise or resources that your industry could share.
• How could you collaborate with other organisations to deal with your industry’s waste products in a circular way?

Maintaining people’s wellbeing through the transition

Making large-scale changes in order to meet emission reduction targets will affect New Zealanders in different ways. Under the Paris Agreement, the Government has agreed to ‘take into account the imperatives of a just transition of the workforce and the creation of decent work and quality jobs…’. In New Zealand, the Equitable Transitions Strategy is designed to address this.

We recommend localised transition assessments, taking into account cultural, geographic, and socio-economic factors. Local private industry and council working groups could be used to develop alternate employment pathways and transition plans in isolated communities that are dependent on one industry.

Education, support, and capacity building strategies for vulnerable populations will help to ensure their understanding of funding mechanisms and tailored solutions.

Furthermore, addressing the transfer of financial costs from implementers to consumers is crucial, especially in terms of landlords passing costs onto tenants. Improving the accessibility and awareness of support schemes can help achieve a just transition.

• Lend your support. Use Corporate Social Responsibility initiatives (such as company volunteer days or sponsorship) to support local organisations that are moving in the right direction by reducing their emissions or using circular economy principles.
• Negotiate for others. What deals and subsidies can you negotiate for your employees, to help them reduce their emissions, by making the switch to more sustainable modes of transport for example?

Advancing Māori leadership on climate change

The impact of wide-scale emissions reduction on Māori communities is best understood and responded to by Māori leaders.

Recently, Māori leaders within companies under the Engineering NZ and ACE New Zealand umbrella have come together to form a cross-industry collaborative group that seeks to lead the response to challenges that impact Māori communities as well as challenges that exist in this industry. This could be one such challenge.

We propose putting the impact of emissions reduction on Māori communities as a challenge to this forum. The group can unlock community forums to help surface the voice of Māori communities, who are best-placed to frame up and rise to the challenges of climate change and emissions reduction.

Iwi and hapū are the experts within their own communities and this industry forum group is well placed to sit alongside in support and lean into the challenges with technical advice.

• Consider how well your organisation knows the iwi and hapū in the communities you work in. How will the changes your organisation needs to make to reduce its emissions, impact on those communities? Do you need support to engage with those communities effectively?

Research, science, innovation and technology

Organisations have several actionable steps they can take to promote investment in climate innovation and technology.

• Conduct an organisation-wide energy audit to gain insights into current energy usage patterns, costs, and inefficiencies across your portfolio.
• Set clear, clean energy objectives. This involves determining the desired percentage of energy that should come from renewable sources within a specified timeframe. For example, aiming for 100% renewable energy by a particular year can give you a tangible goal to work towards.
• Invest in energy-efficient machinery, HVAC systems, and lighting to reduce energy consumption.
• Leverage available technology and software platforms to optimise your current energy use and drive savings.
• Explore options for on-site renewable energy generation or investing in off-site renewable energy projects. Consider entering into Power Purchase Agreements (PPAs) with renewable energy developers, which involve long-term contracts to purchase renewable energy at a predetermined price.
• Go one step further and consider setting up a corporate venture fund that invests alongside New Zealand venture capitalists in early-stage tech companies addressing climate change.
• Tap into new sources of finance specifically tailored for renewable energy projects. Options such as green bonds, loans, or equity investments can provide the necessary funding for scaling up clean energy initiatives.

By implementing these actions, companies and clients can actively drive investment into climate innovation and technology while advancing their sustainability goals.

Many of our clients are already making good progress on this journey, but if your organisation needs support, we would be happy to assist. Find out more about our work to deliver a more sustainable, resilient future alongside our clients and communities, or get in touch.