Imported Layers Created using Figma Group Created using Figma Shape Created using Figma Shape Created using Figma Imported Layers Created using Figma Shape Created using Figma Shape Created using Figma Imported Layers Created using Figma Path Created using Figma logo Created using Figma “ Created using Figma Group Created using Figma
×

4 sustainability trends from the latest company reporting season

JW web 17
Jorge Waayman | Posted on Sep 13, 2019

Key points:

  • Sustainability disclosure has improved
  • Key focuses include climate change, diversity and waste
  • Real world impact alignment on the rise

The August company reporting season featured many of New Zealand’s largest listed companies disclosing their sustainability initiatives over the year. We observed some of the key trends this season that corporates have been focusing on. These included climate change, gender diversity, waste and the UN’s Sustainable Development Goals (SDGs).

Climate change

Climate change has been at the forefront, with local policy reform and stakeholder pressure prompting corporates to start measuring their impact and introduce initiatives to reduce their emissions. We have seen an increased level of disclosure however the data quality leaves room for improvement given the estimated, unverified nature of most of the data. For example, we observed a2 Milk disclose greenhouse gas emissions data for the first time and some companies such as Contact Energy and Chorus have made progress towards reducing their emissions. However, some companies still lack disclosure in this area or have regressed in terms of their emissions. We will continue to monitor whether these companies can progress towards their long-term targets.

Gender diversity

Gender diversity has been a prominent theme, with companies such as Auckland International Airport and Meridian Energy increasing the proportion of women on the board and in senior leadership. Other aspects of diversity such as ethnicity and age have also been cited as focuses of companies such as the target of 20% Maori and Pasifika staff in Air New Zealand senior leadership.

Waste reduction

Another significant focus this year has been the reduction of waste. Many companies have reported initiatives and progress towards reducing the amount of waste (particularly plastic) in their operations. For example, Fletcher Building have reduced their waste to landfill by introducing recyclable material and increasing the use of biofuels and hybrid machinery across their business operations. This move to reduce waste aligns with action made by the NZ Government in the form of new regulations banning the distribution of single-use plastic bags from retailers that came into force in July this year.

UN Sustainable Development Goals

The UN’s SDGs have also featured in some annual reports as companies are identifying how their operations and sustainability initiatives are contributing to the 17 different SDGs. This represents a changing focus towards creating real world outcomes in the societies in which these companies operate, as opposed to making plans or policies without measurable external impact. However, a ‘greenwashing’ effect can still be evident within an SDG framework if companies have not provided evidence of how they have contributed to a particular SDG.

UNSDG

Source: www.un.org/sustainabledevelopment 

In our view, we are encouraged by the increased sustainability disclosure and initiatives from the latest reporting season but acknowledge that sustainability is a long-term journey and there is still significant progress that can be made. Our 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 as we believe sustainable businesses are more likely to deliver long term value to investors.

IMPORTANT NOTICE AND DISCLAIMER
Harbour Asset Management Limited is the issuer and manager of the Harbour Investment Funds. Investors must receive and should read carefully the Product Disclosure Statement, available at www.harbourasset.co.nz. We are required to publish quarterly Fund updates showing returns and total fees during the previous year, also available at www.harbourasset.co.nz.  Harbour Asset Management Limited also manages wholesale unit trusts. To invest as a Wholesale Investor, investors must fit the criteria as set out in the Financial Markets Conduct Act 2013. This publication is provided in good faith for general information purposes only. Information has been prepared from sources believed to be reliable and accurate at the time of publication, but this is not guaranteed. Information, analysis or views contained herein reflect a judgement at the date of publication and are subject to change without notice. This is not intended to constitute advice to any person.  To the extent that any such information, analysis, opinions or views constitutes advice, it does not consider any person’s particular financial situation or goals and, accordingly, does not constitute personalised advice under the Financial Advisers Act 2008. This does not constitute advice of a legal, accounting, tax or other nature to any persons. You should consult your tax adviser in order to understand the impact of investment decisions on your tax position. The price, value and income derived from investments may fluctuate and investors may get back less than originally invested.  Where an investment is denominated in a foreign currency, changes in rates of exchange may have an adverse effect on the value, price or income of the investment. Actual performance will be affected by fund charges as well as the timing of an investor’s cash flows into or out of the Fund. Past performance is not indicative of future results, and no representation or warranty, express or implied, is made regarding future performance. Neither Harbour Asset Management Limited nor any other person guarantees repayment of any capital or any returns on capital invested in the investments. To the maximum extent permitted by law, no liability or responsibility is accepted for any loss or damage, direct or consequential, arising from or in connection with this or its contents.