September 2024
Welcome to this month’s Sustainable Finance update. Discover our latest insights and upcoming events.
Insights
Second Emissions Reduction Plan consultation submission
The analysis highlighted in the Framework for a Climate Technology Roadmap (April 2024) stated that up to 42 per cent of New Zealand’s 2030 emissions budget targets could be met by actions enabled by digital technology. Yet the Emissions Reduction Plan excluded many of these opportunities. We detailed some of these in our submission to their consultation, which closed at the end of last month.
Australia also legislates for Climate Disclosures
While we’ve been arguing with the Aussies over who invented the pavlova, there’s no debate over who legislated for Climate Disclosures first. Nearly three years later, on 9 September, the legislation enacting the Australian climate-related disclosures regime was passed.
The Australian Treasury expects sustainability reports to be provided by approximately 1,800 entities. The standard set by the Australian Accounting Standards Board (AASB) uses IFRS S2 as a baseline and will likely be issued in the next month. The first reporting year starts on 1 January 2025. It is expected that sections of the first report will be subject to limited assurance.
In New Zealand, a 2022 survey by Environmental Resource Management (ERM) found that companies preparing climate disclosures are spending an average of $539,000 annually. This includes analysis and disclosure of Greenhouse Gases, and scenario analysis, and costs relating to integrating climate risk into business processes. The Australian Treasury believes improving consistency and automating the collection and analysis of data could reduce these costs.
Sustainable Business Council’s Climate Change and Business Conference, 9-10 September
Over 660 people attended in person and online at the Viaduct Events Centre in Auckland. The Minister for Climate Change, Hon. Simon Watts, reiterated the Government’s willingness to work with businesses. He noted in drafting the second emissions reduction plan, to be finalised by the end of this year, the role of the technology sector as an enabler to the climate change transition as one area where the plan would likely change in response to feedback.
However, it is still unclear how the Government will support businesses in delivering gross emissions reductions (e.g. through direct financial assistance or other mechanisms) and how to enable consistent access to accurate climate data between the Government, the private sector and other stakeholders.
AI Forum NZ Summit, 11 September
It was great to hear the Minister for Space and Science, Innovation and Technology, Hon. Judith Collins KC, announcing the launch of GovGPT. Callaghan Innovation will pilot this virtual assistant, which is designed to help Kiwis easily find information such as setting up a business or exporting.
AI is predicted to contribute $76 billion to New Zealand’s annual GDP by 2038, she said. The Minister also believes it is crucial businesses are supported in improving their awareness and uptake of AI, so they can capitalise on the benefits as the rest of the world rapidly adopts this technology.
In the AI Blueprint for Aotearoa 2024, Ministers Chris Bishop and Chris Penk have also outlined priorities for enhancing climate resilience and adaptation, emphasising the crucial role of AI-enabled designs and analyses. It’s expected that automation and AI are expected to play integral roles in Manatū Mō Te Taiao Ministry for the Environment’s (MfE) intensified support for businesses innovating to convert waste into valuable resources at scale.
Investing time and resources to build interconnectedness with AI capabilities and targeted automation is essential for addressing environmental challenges posed by climate change challenges through practical applications.
We were also stoked to meet the team at Prosaic an app that helps small businesses and sole traders connect personal bank, card, and mortgage accounts, uses AI to find and code business expenses automatically and instantly share with Xero, Hnry, or directly with your accountant to claim tax deductions and complete GST returns.
Responsible Investment Association Australasia (RIAA) NZ Conference, 19 September
Executive Director, Evaluation & Oversight and General Counsel of the Financial Markets Authority (FMA) Liam Mason spoke at this year’s RIAA Conference. In his keynote address, Liam highlighted that people found navigating the world of ethical claims by financial services firms complex.
The language is not designed for non-professionals, and concerns about greenwashing are part of the FMA’s focus on transparency and preventing misleading practices – central to maintaining the integrity of New Zealand’s financial markets.
However, with governments and regulators imposing stricter rules, it is becoming increasingly difficult for businesses to make sustainability claims confidently. The complex and evolving nature of environmental, social and governance (ESG) metrics leaves many with an uphill battle.
An unintended consequence of this being seen overseas is green-hushing. This is where companies are not sharing any information about their ESG activities for fear of backlash.
Now more than ever, we need a clear understanding of what means what (e.g. via a NZ-based taxonomy) to ensure compliance and communication of successes.
Upcoming events and conferences
Hong Kong FinTech Week (28 October – 1 November 2024)
This event will include eight forums with the Green FinTech and Impact Forum, including sessions on carbon markets, tokenising green assets, and responsible AI.
Sustainable Business Network – Sustainable Business Awards (TBC November 2024)
The focus of the Awards this year is to encourage a paradigm shift in sustainability. With two new categories, Disruptive Innovation and Transformational Leadership, this year’s awards will highlight pioneering actions that address our most urgent challenges. Entries closed last Friday, and we look forward to seeing the winners announced at their 22nd Awards event.
Future Sustainability Forum, Dubai (4-5 December 2024)
The Dubai International Financial Center (DIFC) will host its second annual Future Sustainability Forum, building on the success of last year’s event and driving sustainability initiatives across industries.
Stay tuned for more updates, and join us in our collective effort to foster sustainable innovation in the sustainable fintech sector.
If you would like to know more about Sustainable Finance, follow our working group activity here.
