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Sustainability themes from reporting season

Jorge Waayman | Posted on Sep 14, 2021
  • Climate change disclosure is increasingly prevalent
  • Diversity and inclusion considerations are growing wider in scope
  • The focus on human rights is rising with inaugural modern slavery statements

While New Zealand is grappling with the latest outbreak of COVID-19, many of the country’s largest companies announced their financial results, as well as their sustainability initiatives over the past year. While companies were affected by COVID-19 related disruptions, many sustainability plans were put on hold, however, it was encouraging to see continued focus on major sustainability issues including climate change and modern slavery.

Some of the key themes we observed from sustainability commentary this year included enhanced climate change reporting, the incorporation of wider forms of diversity and inclusion, and higher transparency on processes to mitigate modern slavery risk.

Climate change

Given the upcoming introduction of mandatory climate change disclosure legislation in New Zealand, there is impetus for companies to prioritise this to ensure they can meet the reporting requirements. Leading practice companies have already started voluntarily reporting climate change information, according to the Taskforce on Climate-related Financial Disclosures (TCFD) framework, and this year we observed more companies either starting or planning to provide TCFD-aligned reports. Reporting quality is still quite variable, which is to be expected given standards are yet to be developed by the External Reporting Board (XRB), and some sectors are inherently more exposed to climate change than others.  

We are seeing a growing number of companies adopt science-based emissions targets that are aligned with a 1.5 degrees global warming scenario in 2050. Examples of companies with new targets adopted over the past year include Genesis Energy, Spark and Vector. These targets are useful to align with the climate science and wider domestic/global targets, but of greater importance will be the execution of strategies to meet them.

In terms of actual emissions performance, this was quite mixed across the board. A clear trend was that most companies reported higher emissions from purchased electricity (scope 2) due to the higher amount of fossil fuel generation in the country necessitated by the dry hydrological conditions (less rainfall in lake catchments). This made it especially difficult for the power generation companies to make progress towards their decarbonisation goals.


Diversity and inclusion have also been in focus with companies starting to expand disclosure beyond just gender representation. The most common other form was age diversity, with companies’ measuring the proportion of their total workforces and/or senior leaders in different age brackets. Ethnic diversity is another aspect featuring more disclosure. For example, companies are developing initiatives to improve the representation of Māori and Pasifika in particular, such as Chorus partnering with TupuToa, an organisation that runs an internship programme aimed towards Māori and Pasifika tertiary students.

Some companies, like SkyCity Entertainment and Precinct Properties, are also being externally recognised for their diverse and inclusive workplaces through accreditations like GenderTick and Rainbow Tick which independently assess multiple criteria in gender equity and LGBTTQIA+ inclusion.

Modern Slavery

Another trend in the social space was the increased attention to human rights concerns across supply chains, with many companies publishing modern slavery statements for the first time. This was largely because there are many dual-listed companies in New Zealand and Australia that are required to provide this disclosure under the new Australian modern slavery legislation.

Like climate disclosure, from what we have observed there is variable modern slavery reporting quality. However, there were some excellent case studies such as Ebos who provided an example of identifying a labour rights issue at one of their suppliers and their swift response in terminating that relationship. A closer look at modern slavery risk practices in the New Zealand market will be covered in the third edition of our thematic Social Spotlight article series[i].


Over the coming year, we expect to see the focus on climate change continue, along with other environmental considerations such as biodiversity which we’re starting to see develop as an emerging theme.

On the social side, we believe addressing inequalities within companies in terms of diversity, pay equity and less tangible measures, like cultural integration and mental health awareness, will be key drivers. All these environmental and social initiatives will continue to be guided by overarching global targets set under the UN Sustainable Development Goal (SDG) framework and the Paris Agreement.

Harbour’s investment process captures a comprehensive range of ESG factors and we will continue to tilt our portfolios towards companies demonstrating leading and improving performance in this space. We believe sustainable businesses are more likely to deliver better outcomes for investors over the long term.



[i] Social Spotlight I: Employee Engagement -
Social Spotlight II: Human Capital Management -


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