Workplace vaccination, the carrot or the stick?

Workplace vaccination, the carrot or the stick?

In the United States, many workplaces now require their employees to be vaccinated.

In an aggressive effort to get the pandemic under control, US President Joe Biden has directed businesses with 100 or more employees to prepare to request proof of vaccination or test employees weekly for Covid-19. By the end of October, all US government employees must be vaccinated.

A significant 74 per cent of New Zealand CEOs say they can envisage a situation where most employers will require their staff to be vaccinated against Covid-19 to protect the safety of the wider workforce.

Just 12 per cent say they can’t see this happening, and 14 per cent are unsure.

Fletcher Building chair Bruce Hassall says that “increasingly we will see New Zealand businesses rolling out vaccination policies that start with ‘we strongly encourage their people to get vaccinated’, then ‘we expect people to get vaccinated’, followed by ‘we will require their people to get vaccinated — our customers will expect nothing less!”

Says Fulton Hogan group CEO Cos Bruyn: “It cannot impinge on freedom of choice requirements, however most employers will react to customer requirements.”

Beca CEO Greg Lowe says vaccination will be required for certain activities, with travel being the first.

Vaccine incentives spurring workers to get shots

To encourage vaccine uptake, 33 per cent of respondents to the Herald’s Mood of the Boardroom survey say they either have incentives or plan to implement incentives for their staff to get vaccinated against Covid-19.

Many of those say they are giving leave for employees that get vaccinated or some other allocation of additional holiday pay. Others are providing an additional carrot with extra cash payments or vouchers for vaccination, and even a lottery for the month based on the number of vaccinations done.

Westpac is providing two half-days of leave to get shots and has also given an additional day of Covid leave for staff to use before the end of the year to help support families to get vaccinated. The Warehouse Group is offering a one-off payment of $100 to all fully vaccinated employees across its businesses.

Spark CEO Jolie Hodson says her immediate priority is to encourage all staff to get vaccinated, by making it as easy as possible for them to do so. “We will look to host vaccinations on site, as we do for the standard flu shot, and will consider if we need to do anything further than this in time.”

Z Energy chief executive Mike Bennetts says, “We will ensure that staff are able to prioritise this ahead of their work responsibilities.”

Beca’s Lowe says all staff are being encouraged to get vaccinated, and Beca is working to provide on-site vaccination as well as the use of community clinics. “Our people understand the need to get protected,” he says.

A director says one of her organisation is providing minibuses and other transport logistics to help get staff to vaccine centres during work hours.

But there is still a significant number of executives — some 59 per cent — that say they have no plans to offer incentives to staff to get vaccinated, and the rest (8 per cent) are unsure.

“They know they will be the first to be laid off if another lockdown puts strain on staff numbers,” says an education provider. “We should not be incentivising, we should be waving the stick to those who place workplace and nation at risk — drop the ‘kindness’.”

Says one investment director: “Our staff are intelligent people who are used to managing their lives without a ‘big brother’ approach.”

From a food producer: “Surely the need is compelling enough.”

Business confidence on the rebound

Business confidence on the rebound

Confidence has rebounded in the 2021 Mood of the Boardroom after record low levels in last year’s election survey.

Cumulatively, respondents to the Herald survey rated their optimism in the New Zealand economy at 2.70/5 — up significantly from last year’s score of 1.36/5.

A professional director notes that 12 months ago, the forecasts of unemployment, debt and GDP were completely at odds with what has since unfolded: “The outlook is substantially more positive, and this will continue, assuming we complete our vaccine rollout by year end and start relaxing border restrictions in the first quarter of next year.”

But Cathy Quinn, a director of Fletcher Building and Fonterra, says she is less optimistic about the New Zealand economy, as she cannot yet see the game plan for New Zealand to open up to the world again.

“The rest of the world is already opening up borders again — albeit with conditions as to which countries. Evidence of Covid-19 vaccination, pre-departure and arrival tests etc.,” she says. “I fear if New Zealand does not do so similarly in 2022, our economy will suffer as well as the wellbeing of Kiwis.”

Auckland Business Chamber CEO Michael Barnett says prior to Covid-19 there were some sectors that were driving the New Zealand economy. “If we are smart, we will relaunch our economy on those sectors that were doing well and be creative about reinventing those sectors that were not.

“Internationally, we need to be wary of small economies protecting themselves and introducing non-tariff barriers to do so.”

Newshub Nation panel discussion (video)

It was nice to be back on the Newshub Nation panel this weekend with Ella Henry and Dileepa Fonseka, talking about opening the border, climate change, and a few laughs about the Winston Churchill painting controversy!
As New Zealand starts its journey to open to the rest of the world world, it was interesting to reflect on technologies being implemented globally that could play a part in NZ’s response:
🎤 The increased use of micro-influencers, particularly in the United States, to reach out to small pockets of communities that are vaccine-hesitant and allay concerns.
📌Wristbands (Singapore, South Korea, Hong Kong) and geotagged facial recognition (Western Australia) for ensuring home quarantine.
📱 Linking the Covid tracer app to vaccine status so that entry requirements can be varied based on risk and are validated when you scan into a venue (such as in Singapore, which requires double vaccination to enter restaurants, but a lesser requirement for office spaces).

 

New shifts in sustainability trends continue at pace

New shifts in sustainability trends continue at pace

The final leaders’ communique from the G7 states: “2021 should be a turning point for our planet as we commit to a green transition”.

Many of the sustainability trends in business that were on the rise last year are continuing at pace.

The pandemic highlighted the interconnectedness between social, environmental and economic challenges. It reinforced that an approach, centred around strong environmental, social and governance (ESG) principles is important for a sustainable future and that companies with strong track records in these areas tend to do well in the long-term.

But there are distinct new shifts in sustainability that have emerged over the past year that will shape the agenda and have a major impact on business in the months and years ahead.

Increased data and disclosure to counter greenwashing

The demand from consumers for sustainable business practices brings with it a growing concern that greenwashing is being used to obfuscate environmental credentials.

Recent audits have shown this concern has substance. A study of 12 of the biggest British and European fashion brands found 60 per cent of environmental claims could be classed as “unsubstantiated” and “misleading”. In another study, a sweep of company websites across a range of sectors by the European Commission found that green claims in 42 per cent of cases were exaggerated, false or deceptive under EU rules.

There is a growing expectation that companies will substantiate claims made.

Going a step further, some consumers and investors are expecting companies to disclose a plan for how their business model will be compatible with a net-zero economy — including detail on how that plan is incorporated into a long-term strategy that it is reviewed by the board of directors.

Earlier this month, former US Vice-President Al Gore told the Bloomberg Green Summit: “we must be vigilant about the rising threat of greenwashing or risk derailing the hard-won progress” that has been made in recognising the climate crisis.

He also noted that sustainable investing has “entered the mainstream,” providing even more openings for potential greenwashing.

Gore is right — sustainable investment opportunities have begun flooding the market to meet demand from investors looking to make decisions aligned with their ESG values. Of the S&P 500, about 90 per cent of companies publish sustainability reports, yet only 16 per cent have any reference to ESG factors in their filings — clearly demonstrating the gap between what companies voluntarily publish and regulatory disclosure.

To counter this, a broad range of requirements are being swept in to standardise the current patchwork of regulations and disclosure frameworks.

In March, Wall Street’s top regulator the Securities and Exchange Commission (SEC), announced the creation of a Climate and ESG task force to develop initiatives that will “proactively identify ESG-related misconduct”.

“Climate risks and sustainability are critical issues for the investing public and our capital markets,” said SEC acting Chair Allison Lee.

The task force will use sophisticated data analysis to identify potential violations, and evaluate and pursue tips, referrals and whistle-blower complaints on ESG-related issues.

The CFA Institute, a global association of investment professionals, is developing ESG standards for investment funds and other products, aiming to “provide greater product transparency and comparability for investors by enabling asset managers to clearly communicate the ESG-related features of their investment products”. Draft guidance was released earlier this year that the CFA Institute hopes will be adopted by fund companies around the world.

Global action to build back better and provide a green alternative to Belt and Road

One of the most dramatic turnarounds from the Trump administration has been the pace at which President Biden has thrown the weight of the United States behind global efforts to address global ESG issues.

Many of the Biden administration’s key people have been brought in with a strong environmental focus. Alongside this, the US quickly re-joined the Paris Climate Agreement, a new White House office of climate policy was established, and former Secretary of State John Kerry was appointed as international envoy on climate change.

In May, the White House issued an Executive Order that lays out a whole-of-government approach to addressing climate risks.

The recent Group of Seven (G7) meeting in Cornwall, United Kingdom, saw leaders announce the “Build Back Better World” (B3W) partnership. B3W is a “climate-friendly” initiative to mobilise private capital to help narrow the US$40+ trillion infrastructure need in the developing world which has been exacerbated by the Covid-19 pandemic — and has been described by some as a green counter to China’s Belt and Road Initiative.

Alongside this, the G7 leaders put forward ambitious targets for climate action. One of these targets saw a commitment to long-term strategies to net-zero greenhouse emissions by 2050 as soon as possible, “making utmost efforts to do so by COP26 (the UN Climate Change Conference COP26 in Glasgow in November).”

They also committed to set net-zero targets for energy generation in the 2030s and end direct government support for new thermal coal generation capacity without co-located carbon capture and storage technologies by the end of this year.

All other inefficient fossil fuel subsidies will be phased out by 2025. There was also a commitment made to stop direct funding for coal-fired power stations in OECD nations by the end of this year.

Other commitments made during the G7 that will impact the sustainable finance sector include the mandating of climate disclosures; a commitment to “intensify efforts in enhancing the offer of more sustainable transport modes” including encouraging the phase-out of traditional passenger vehicles in favour of electric vehicles by 2040; and a goal to jointly mobilise US$100 billion per year from public and private sources through to 2025 for developing countries.

These sweeping changes will have wide-ranging implications for governments, business, innovation, and financing.

The final leaders’ communiqué from the G7 states:

“2021 should be a turning point for our planet as we commit to a green transition” and accelerate efforts to cut greenhouse gas emissions, and “we acknowledge our duty to safeguard the planet for future generations” — although some have criticised the G7 for not being more ambitious in financial commitments to developing countries and for not being detailed in the plans to promote a green industrial revolution.

Threats to nature and biodiversity taking centre stage

In 2019, the UK was the first major government to commission a review into the economics of declining biodiversity.

The final report, the 600-page Dasgupta review, was released this year, and clearly links economic success to biodiversity.

It notes that our economies, livelihoods and wellbeing all depend on nature, and considers nature as an asset in the same way as produced capital (roads, buildings and factories) and human health (health, knowledge and skills) are assets:

“We rely on nature to provide us with food, water and shelter; regulate our climate and disease; maintain nutrient cycles and oxygen production; and provide us with spiritual fulfilment and opportunities for recreation and recuperation, which can enhance our health and wellbeing.

“We also use the planet as a sink for our waste products, such as carbon dioxide, plastics and other forms of waste, including pollution.”

The World Economic Forum estimates that $US44 trillion of economic value generation representing more than half of world GDP is moderately or highly dependent on nature. Yet the world’s biodiversity is declining faster than it has at any other time in human history, with the current rate of extinction tens to hundreds of times higher than the average over the past 10 million years — and accelerating.
We can expect to hear more about this and see it impact business decision making. The UK government has published an amendment to its Environmental Bill, requiring new “nationally significant” infrastructure projects — including for transport and energy — to provide a net gain in biodiversity and habitats for wildlife.

Protecting and enhancing nature will need concerted, coordinated action and will be major topics at this year’s upcoming COP15 (UN convention on biological diversity) in China and COP26 (UN climate change conference) in Glasgow.

“This year is critical in determining whether we can stop and reverse the concerning trend of fast-declining biodiversity,” says UK Prime Minister Boris Johnson.

“As co-host of COP26 and president of this year’s G7, we are going to make sure the natural world stays right at the top of the global agenda,” he said. “And we will be leading by example here at home as we build back greener from the pandemic.”

Sustainable Business: Climate Change Commission lays out roadmap

Sustainable Business: Climate Change Commission lays out roadmap

Last month, the Climate Change Commission released its final report: Ināia tonu nei: a low emissions future for Aotearoa, which lays out the roadmap for New Zealand to meet its greenhouse gas reduction obligations of reaching net zero emissions of long-lived greenhouse gases and reducing biogenic methane emissions between 24-47 per cent by 2050.

The 418-page report calls for transformation across almost all facets of the economy and sets out large-scale changes that will need to be taken by central government, local government, individuals, and business.

These changes will result in a hit to New Zealand’s GDP.

The Commission assessed that the level of GDP could be around 0.5 per cent lower in 2035 and 1.2 per cent lower in 2050 than it would be otherwise. Significantly, it says that not acting and delaying key actions could result in the level of GDP in 2050 falling by around 2.3 per cent.

Transport

Transport makes up almost 33 per cent of New Zealand’s total long-lived gas emissions and is the fastest-growing source of emissions.

The report says there is an opportunity to decarbonise transport by 2050 by investing in the right infrastructure and systems, encouraging changes to behaviour, and adopting technologies that are available now and improving fast.

It recommends the Government set targets by 2022 and implement a plan (including substantially increasing the share of central government funding) to increase walking, cycling, public and shared transport to displace vehicle use.

Increased numbers of people working from home and a switch to low emissions vehicles will help, but the report notes the latter will require a “rapid increase” in electric vehicle sales, with nearly all light vehicles entering NZ electric by 2035.

The report also assumes from 2030, short-haul aviation (such as Wellington to Nelson) would take place in new generation planes.

This was modelled with electric planes, but biofuels or hydrogen could also be used to make sustainable aviation fuel for longer distance flights.

Forestry

Around 380,000ha of new exotic forestry (particularly pine) will need to be established from 2021 to 2035. These absorb carbon quickly, reaching their average carbon stock after around 20 years. The Commission recommends a comprehensive plan for new native forests on less productive land.

These absorb carbon more slowly than exotic production forests but will continue to do so for centuries until they reach maturity. This will help offset long-lived greenhouse gas emissions in sectors with limited options to reduce emissions from 2050 and deliver wider benefits for erosion, soil health, water quality and biodiversity.

Agriculture

For agriculture, the Commission says New Zealand needs to reduce its livestock numbers 13.6 per cent by 2030.

It predicts that while New Zealand will still produce roughly the same amount of milk and meat, it will do so with fewer animals, and expects some farms to replace animals with horticulture.

It says low-methane sheep will play an important role (and will help cut methane by 10 per cent by 2030), along with a reduction in the use of fertiliser, and new technologies will need to come on board, such as vaccines that can help reduce emissions from livestock.

Energy

The report says replacing fossil fuels with low-emissions electricity will play an essential part in New Zealand’s transition, requiring a major expansion in the electricity system which should start immediately.

It recommends the installation of new coal boilers is stopped immediately, and a timetable set to phase out fossil fuel use in existing boilers.

New Zealand Institute of International Affairs 2021: Prime Minister Jacinda Ardern interview (video)

Interview with Prime Minister Jacinda Ardern at the New Zealand Institute of International Affairs 2021 conference, ‘Standing in the Future: New Zealand and the Indo-Pacific region’ with co-hosts Tim McCready and Ziena Jalil.

 

New Zealand Institute of International Affairs 2021: Kurt Campbell interview (video)

Address and interview with Kurt Campbell, White House Coordinator for the Indo-Pacific, at the New Zealand Institute of International Affairs 2021 conference, ‘Standing in the Future: New Zealand and the Indo-Pacific region’ with co-hosts Tim McCready and Ziena Jalil.

 

Capital Markets report: Three business leaders on the Government's wealthy investor proposals (NZ Herald)

Capital Markets report: Three business leaders on the Government’s wealthy investor proposals (NZ Herald)

Anna Kominik

Wisk’s Asia-Pacific regional director Anna Kominik leads a multinational team bringing the world’s first all-electric, self-flying air taxi to market.

On the government’s recent announcement about changes to immigration policy she says anything that supports greater investment in New Zealand is useful.

“But we need to do more to amplify New Zealand’s capability and capacity to scale businesses,” she says.

Kominik says we also need people, like current and former chief technical officers and chief operating officers — those people not just with the funds, but also the skills and experience in growing companies and taking them global.

“We need to be really ambitious for the start-ups that have been nurtured over the past decade and who are ready and wanting to take on the world.”

While the announcement came with little detail, Kominik says rather than letting in random high net worth individuals, we must identify the gaps in the New Zealand companies that are scaling fast and/or who need the capital most acutely along with the ability to have the biggest impact both economically and socially.

“This is the perfect time to be focused on building high-value jobs,” she says. “But our Covid advantage won’t last for long and we need to seize it more aggressively.”

Kominik says we need an overarching strategy for how we are planning to grow our trending industries, including digital, creative, gaming, medtech, food and aerospace.

“These are industries that are growing quickly in New Zealand and have the potential to deliver high quality returns — both socially and economically.

“It would be good to see how this scheme was feeding into supporting these sectors and companies to scale up and become even more ambitious.”

At the Auckland’s Future, Now Summit held earlier this month, Kominik told attendees that she is aware of companies with amazing technologies that would love to come to New Zealand right now.

“They want to do due diligence, they want to come through the border.”

She says New Zealand has the opportunity to define what our vision is and attract companies that support it to come and locate themselves here.

“These are billion-dollar companies already that are going to create high-value jobs,” she says. “We could take any kid who likes an engine, and we could turn them into an electric aircraft maintenance engineer — it’s a very, very high-value job right now.”

Early last year, the NZ Government signed a memorandum of understanding with Wisk to support a world-first passenger transport trial of its air taxi.

At the time of the announcement, Kominik said: “New Zealand’s focus on decarbonising its economy as part of the electric transport evolution directly aligns with Wisk’s mission to deliver safe, everyday flight for everyone through effective, accessible and sustainable urban air mobility solutions.”

Caroline Rainsford

Country Director for Google New Zealand, Caroline Rainsford, is pleased to see the Government’s announcement to support targeted, high-quality investment in New Zealand.

“This will lead us in a positive direction toward bringing skills and new technology here,” she says.

Rainsford says the targeted investment, coupled with the investment of $44 million to support small businesses through the extension of the Digital Boost Training Programme announced in the Budget — which Google has pledged to support — is critical to ensure the benefits of the growing digital economy are shared widely and equitably.

The Government says the programme will provide up to 60,000 small businesses with digital skills training to aid in “the transition to future ways of working”.

Speaking at the Auckland’s Future, Now Summit earlier this month, Rainsford said she has always believed in the role of digital transformation to support Auckland’s economy — but more so now than ever, and what is important is the uptake of skills.

“We can have all this technology and we can invest in ICT infrastructure in New Zealand, but if we don’t have the digital skills and capability, we can’t realise the benefit of it.”

She says whilst we are not doing a bad job in Auckland of embracing some of these, there is so much more opportunity.

“Every day I get first-hand experience of seeing businesses in New Zealand that over the last year have grappled with the impacts of Covid,” she says.

“I have seen companies embracing technology to reach customers digitally online both here in New Zealand and overseas. I have seen people using AI to really sort out the impacts on supply chain during Covid — but we need to do so much more.”

A report commissioned by Google New Zealand that was released last month calculates that if leveraged fully in the economy, digital technologies could create an annual economic value of $46.6 billion by 2030.

“To put this in perspective, this is equivalent to about 14 per cent of New Zealand’s GDP, or the combined GDP supported by Canterbury and Hawke’s Bay,” it says.

To fully capture the digital economy, the report has identified three main pillars of action the country could take.

This includes supporting the adoption of technologies in key industries, digitally upskilling the current workforce and future talent, as well as promoting digital export opportunities.

Across these areas, Google says it has made significant contributions in advancing New Zealand’s digital transformation journey.

This includes supporting the development of digital skills through programmes like the Google Certification Programme, Digital Fluency Intensive for teachers, and its partnership with Spark to run workshops to support New Zealand businesses in using digital tools by delivering digital skills training for small and medium-sized enterprises (SMEs) at no cost.

Rob Fyfe

The Government has foreshadowed opening the door to some 200 foreign investors through a reset of its immigration settings.

The announcement, made earlier this month by Tourism Minister Stuart Nash, was described by the government as a “once-in-a-generation reset” of the immigration system.

As part of the announcement, Nash — standing in for Immigration Minister Kris Faafoi — said new border exemptions would allow those representing high-value international investment interests to come to New Zealand over the next 12 months to conduct due diligence and transact the sort of deals that will play an important role in supporting New Zealand’s economic recovery from Covid-19.

“We want targeted, high-quality investment that establishes frontier firms, brings skills and technology to New Zealand,” he said.

“We have also created border exceptions for the Innovative Partnerships Programme and New Zealand Trade and Enterprise’s Investor Programme to enable representatives from global companies to come to New Zealand to conduct on-the-ground negotiations with companies that they wish to invest in.”

In making the announcement, Nash said the investment through these programmes will create highly-skilled jobs, enable the valuable transfer of knowledge and technology, and increase international connectivity for New Zealand firms as they allow us to position ourselves globally.

Rob Fyfe, who has been working as business liaison for the government, says he has been highlighting this opportunity since July last year, and the announcement took longer to arrive than he had hoped for.

“In the intervening period, some of the comparative advantage that existed in the back half of 2020 that was motivating interest in New Zealand as a significant destination for investment has probably dissipated,” he says.

That said, he says the opportunity is still significant and New Zealand continues to be an attractive destination for international investment.

“In principle I am encouraged by the announcement.

“As to whether 200 is enough — I have got no idea — a heck of a lot could be achieved by allowing 200 pre-qualified, validated investors into the country.

“I would hope if we exhaust that quota, because there is so much demand and opportunity, the Government would extend the quota.”

There is still little detail so far in the announcement, but Fyfe says it is important we move at speed to get the pipeline flowing.

He says we should be prioritising investment that stimulates either demand or supply of high value jobs in the economy and/or investment in technologies and capabilities that will enhance our global competitiveness and the advancement of our green economy and sustainability ambitions.

Competition, IP, and confidentiality issues mean that officials will need to be the decision-making authority to determine which investment interests are allowed to proceed, but Fyfe hopes they will consult with business leaders and academics to identify areas of focus and opportunities.

But he notes that any international investment needs to be supported by domestic investment in education and skills, and skilled migration to ensure we can provide the workforce to support inbound investment and the relocation of high-value businesses to New Zealand.

Green Building: Interview with Minister James Shaw (NZ Herald)

Green Building: Interview with Minister James Shaw (NZ Herald)

“When the Climate Change Commission released its draft advice in January 1, I said that I had never felt more confident that a climate-friendly, prosperous future for New Zealand was within reach,” says James Shaw. “But that will only possible if we take action to cut emissions right across the economy — including buildings.

“Right now, our homes and buildings are currently responsible for around 20 per cent of New Zealand’s carbon footprint.

“Emissions from the construction sector have increased by two thirds over the past decade. If we continue on this path and don’t change the way we build, the risk is that we lock in higher emissions for decades to come. That will only make it harder to meet our emission reduction targets and take us further away from fulfilling our commitment to future generations that we will pass on a cleaner, more stable, and less polluted planet.

“So what we need to be doing is rethinking the way we design, build and use our homes and workplaces so they have a positive impact on our climate and natural environment.

“Our Government has made a great start on this. For example, we are making sure all new Kāinga Ora public homes are energy efficient.

“We have also launched the Building for Climate Change programme to improve how we build while reducing carbon emissions.

“As my colleague the Minister for Building and Construction, Poto Williams, said in her piece for this business report, the change “envisaged by the programme is significant.” But it’s not only climate outcomes: the programme will also improve the energy efficiency of housing, meaning lower electricity bills, warmer, drier and better ventilated homes, and improved health outcomes for New Zealanders.”

The Herald asked Shaw, What is your vision for new builds?

Shaw: I think most people around the country want to know that their homes, and the places they work and spend time in at the weekends are part of the solution to climate change. Put simply, that’s my vision. I want people all over Aotearoa living, going to work, or socialising with friends in highly energy-efficient buildings powered by clean energy.

Changing the way we build to be more climate-friendly will be a huge part of this, but the truth is, most of the buildings that will be in place in 2050 — the date by which Aotearoa will need to be net-zero carbon — have already been built. So we also need to be thinking about how we reduce emissions from existing buildings.

In their draft advice the Climate Change Commission said that we need to improve the energy efficiency of buildings, alongside decarbonising the energy used for heating, hot water and cooking.

Once the Commission’s final advice is released at the end of May we will start work on an Emissions Reduction Plan setting out how we intend to meet our targets. That plan will need to cover every part of the economy — including, but not limited to, new and existing buildings.

Herald: What do you see as the biggest challenge for the industry to transform the built environment?

Shaw: I might not be the best person to explain the challenges of cutting emissions from buildings. What I’d most like is for the industry to share those challenges with us so that we can look at possible solutions.

I would imagine though that one of the main challenges is integrating low-carbon design principles right from the start. In other words, getting the engineering, technology, and design experts around the table right from the start.

Building emissions are primarily due to heating, cooling, and lighting, though the embodied emissions in materials are also significant. Decisions about all of these aspects of a building tend to be made fairly early in the process. If they could be made from the point of view of thinking about what can be done to reduce emissions, then that would make a huge difference. The Building and Climate Change Programme that I mentioned earlier will help with this, as it does set targets for new buildings to reduce embodied and operational emissions.

Herald: Building companies, real estate firms and others in the industry have urged the Government to speed up action on fulfilling its pledge on environmental standards in government buildings. Why are you not moving faster?

Shaw: The first thing to say is that I welcome the fact the building and construction sector want us to speed up action. It’s a positive sign of the part the sector sees itself playing in helping to meet our climate change targets.

There is no question that Aotearoa New Zealand’s future is low carbon. How quickly we get there will, of course, depend a great deal on the decisions we take over the next few years. And so if the sector does want us to move more quickly, I would encourage them to keep demanding more of us,

particularly as we start to think about what goes in the Emissions Reduction Plan. I would also encourage the sector to share their journey with New Zealanders more broadly so that everyone can see just how important this sector is to the future of Aotearoa New Zealand.

But that’s not all. The sector can also go further themselves. As I have said, the low carbon direction we are heading in is clear. And so, there is much the sector can do to generate new ideas, set industry ambition, and establish New Zealand’s building and construction sector as a global leader.

The Government does have a role to play in this and can lead by example.

As part of the recent commitment we made to require the public sector to achieve carbon neutrality by 2025, a new energy efficiency rating standard is being applied to government offices. Work is also under way on reducing embodied carbon in Government buildings and I have been leading an initiative to transition schools and hospitals up and down the country to clean energy. By making these changes we can harness the power of government procurement to lead by example and create opportunities for new skills and technologies to emerge.

Herald: Finally, what role do you hope the Government’s Emissions Reduction Plan will have in decarbonising buildings?

Shaw: The building and construction sector can, and should, play a key role in helping create a low carbon future for Aotearoa New Zealand.

Draft advice from the Independent Climate Change Commission says the same. In their report they identified some of the opportunities in this area, particularly around energy efficiency and construction materials.

Action to reduce emissions from all buildings will form a key part of the Emissions Reduction Plan which will be published later this year, after the Commission publishes its final advice.

Getting the Emission Reduction Plan right will be crucial. It is going to determine the direction of climate change policy for at least the next 15 years, so I would encourage the building and construction sector to input to that process.

China Business Summit 2021: event MC conference close (video)