New Zealand has the opportunity to achieve our climate change targets in a way that is economically affordable, technically feasible and socially acceptable – if we start now
New Zealand is ranked ninth globally in KPMG’s first ever Net Zero Readiness Index (NZRI) released today in the lead-up to COP26. The benchmark report compares the progress of 32 countries in reducing greenhouse gas emissions and assesses their preparedness and ability to achieve net zero by 2050. Norway took the overall top ranking, with the UK and Sweden in second and third place.
New Zealand’s Agri-Food sector is ranked first for decarbonisation preparedness for Agriculture, Land Use and Forestry. Today’s launch follows KPMG’s commitment, announced last week, to invest more than US$1.5 billion over three years on a new Environmental, Social and Governance (ESG) programme, to drive global solutions - from climate change to inequality, and social justice to biodiversity loss.
The NZRI and New Zealand
KPMG’s Executive Chair Matt Prichard says, “It is great to see New Zealand rank highly and these results are testament to the ambition and hard work of our key sectors. They also reflect our unique sense of kaitiakitanga, our pride in our whenua, biodiversity, and culture. New Zealand has world-first legislation, such as mandating the use of Taskforce on Climate-Related Financial Disclosures recommendations, and the Carbon Neutral Government Programme. We can be justifiably proud of the progress we have made over the last decade, but we still have considerable work to do.”
Matt also points out that New Zealand’s overall ranking was driven primarily by the agricultural sector’s readiness. New Zealand does not rank in the top five of the other four highest-emitting sectors evaluated– electricity and heat, transport, buildings, and industry.
“There is also nuance to the findings that we must consider. New Zealand is one of nine countries in the Index which has made their net zero commitments legally binding. We know that political will is a critical factor in our drive to net zero. Our commitment does not correlate with our delivery capability across the five highest-emitting sectors, as we are still behind some countries that haven’t legislated net zero.
“Net zero is both ambitious and essential, requiring transformational change across every industry, sector and business. We need detailed plans and support mechanisms from government to
accelerate action. Mandatory business reporting, the power of the financial markets, public support for climate action and collaboration at all levels are also key. The Government’s delayed Emissions Reduction Plan, now due next year, must outline targets alongside the pathways.”
“We need to hold each other accountable and, more importantly, support each other in this transformation,” says Matt.
The NZRI and New Zealand Agribusiness
KPMG’s Global Head of Agribusiness, Ian Proudfoot says, “Having our most important economic sector ranked first in this global survey is exciting. This ranking represents New Zealand’s high levels of forest biomass, low levels of food loss and our comparatively high number of agricultural clean tech companies. However, when you are first there is only one way you can move in subsequent surveys, unless we work harder, faster, and more collaboratively. There is still a lot of work to do, and with well-resourced countries only just behind us, there is no room for complacency.
“The survey is telling us that the work that has been, and continues to be, done through initiatives like the New Zealand Agricultural Greenhouse Gas Research Centre and He Waka Eka Noa, is positioning our industry to be a global leader in climate aligned food and fibre production. “In this year’s KPMG Agribusiness Agenda, we noted the importance of incorporating blue into our pursuit of a green, decarbonised future. Oceans make up 93% of New Zealand’s exclusive economic area and offer the opportunity to effectively sequester carbon and simultaneously grow protein in a way which could transform New Zealand’s food and fibre systems into the future.
Ian says that New Zealand’s current aim is to stop generating a negative environmental impact. “For most emitting industries, such as transport or energy, this is as usually far as they can go. Agri-Food, however, has the inherent possibility of being one of the few industries that can have a positive climate impact. Rather than just minimising further damage, the industry can take a lead in shifting the conversation towards creating new opportunities for food producers while reversing the historic damage that has been done.
“We will use the NZRI result to build on the platform we have already built, one that today is broader and better than anybody else has built to date.”
The NZRI considers 103 indicators split between national preparedness and sector readiness and draws on experts from around the world. The 32 countries surveyed are responsible for around three-quarters of global emissions.
The Net Zero Readiness Index 2021 was produced by KPMG IMPACT, established last year to support and empower organisations to contribute to the UN’s Sustainable Development Goals.
KPMG IMPACT is a holistic approach to help organisations to be more sustainable, more resilient, more inclusive, and more aware of their impact, all while unlocking shared value. It draws on expertise from across the firm to measure new metrics, develop new reports that look beyond pure financials, to architect roadmaps for carbon neutral operations, and undertake reforms to progress social outcomes for New Zealanders.