Global markets are increasingly emphasising sustainability and climate change, putting New Zealand exporters in a crucial point. A report by Chapman Tripp for the Aotearoa Circle, titled "Protecting New Zealand's Competitive Advantage," highlights the significant impact of international sustainability standards on our exports.
Remarkably, 80% of New Zealand's export value goes to countries with mandatory climate-related disclosures. The European Union’s (EU) carbon border adjustment mechanism (CBAM), introduced in late 2023, imposes costs on embedded emissions in carbon-intensive exports to the EU, prompting exporters to reevaluate their sustainability practices. Additionally, the EU's Deforestation Regulation could pose further challenges for New Zealand exporters.
Nicola Swan, Chapman Tripp Partner and report co-author, notes the rapid and extensive changes in environmental, social, and governance (ESG) reporting and climate-related disclosures (CRD). Given New Zealand's reliance on trade and international capital, keeping up with these global demands is crucial. Free trade agreements (FTAs) now often include clauses focusing on climate and environmental standards, embedding sustainability into trade practices.
Vicki Watson, Aotearoa Circle's chief executive, highlights that over 60% of the world GDP is now subject to mandatory CRD measures. This global trend is not going away, making it essential for New Zealand to adapt quickly. Alana Lampitt, Chapman Tripp Partner and report co-author, emphasises that meeting the sustainability expectations of overseas customers is becoming necessary to maintain business relationships. Simon Tucker, Fonterra's director of global sustainability, points out the growing number of customers with science-based climate targets.
The report offers strategic guidance for exporters to navigate these challenges, underscoring the importance of adopting robust sustainability practices. By integrating comprehensive sustainability measures, New Zealand can safeguard its export markets and contribute to global environmental goals. With proactive strategies and a clear focus on sustainability, New Zealand exporters can thrive in this evolving global landscape.
