New Zealand Faces Climate Challenge Despite Emissions Decrease

New Zealand’s overall emissions decreased in 2023, according to the Climate Change Commission. This reduction positions the country on track to meet its first emissions budget by 2025. However, the news is tempered by concerns regarding the country’s ability to adhere to its 2030 budget and achieve the third emissions budget for 2031-2035. A renewed commitment to climate action is essential to navigate these challenges.

While transitions may seem intimidating, they are crucial for stability. Proactive change generally fosters agency, whereas reactive measures can create uncertainty, disrupting organizations and communities. The past three years have seen a shift in governance expectations, largely driven by climate-related financial disclosures from major companies and financial institutions. More organizations are beginning to report their environmental and social impacts, paving the way for a broader discourse on sustainability.

Emerging Leadership and Reporting Trends

Principles of the circular economy and nature-positive strategies are becoming increasingly prominent in corporate narratives. Many sectors are making strides in improving climate action targets and reporting practices. Exporters, in particular, recognize that environmental credentials significantly impact their success in various markets. As a result, enhancing performance in these areas remains a priority.

Despite these positive developments, significant structural challenges linger. New Zealand’s per-capita emissions remain among the highest in the OECD. While reporting has improved, the quality and depth of these disclosures vary widely. Numerous organizations acknowledge climate risks but struggle to outline credible pathways for transitioning, especially concerning Scope 3 emissions and adaptation planning. Small and medium-sized enterprises (SMEs), critical to the New Zealand economy, often lack the necessary resources to measure their environmental performance or adapt to changing supply chain demands.

The recent amendments to the Climate Risk Disclosures Framework have further complicated the landscape. Changes have reduced the number of companies and fund managers required to disclose their climate risks, raising concerns about the framework’s effectiveness. The loosening of disclosure thresholds could hinder comprehensive analysis of climate risk across sectors. Additionally, the decision to lower biogenic methane reduction targets diverges from earlier commitments aligned with international scientific consensus and the Paris Agreement. This strategic shift prioritizes short-term economic gains over long-term climate integrity.

Indigenous Knowledge and a Sustainable Future

New Zealand’s path forward may incorporate unique elements rooted in mātauranga Māori, kaitiakitanga, and te taiao principles. Co-governance frameworks and community-centred circular economy initiatives highlight how sustainability can be both culturally grounded and socially inclusive. These approaches emphasize stewardship and intergenerational responsibility, principles increasingly recognized on the international stage.

Nevertheless, many organizations are still at the early stages of embedding these frameworks. Transitioning from symbolic engagement to meaningful performance and partnerships will be vital over the next decade. The transition to a sustainable economy presents New Zealand with significant opportunities, including global market differentiation and enhanced community resilience.

The urgency for change and motivation to act remain challenges. To maintain credibility and competitiveness, New Zealand businesses must evolve from mere compliance to embrace innovation, transparency, and long-term thinking. The nation possesses the values, knowledge, and creativity necessary to lead in this area. What is required now is a commitment to action at scale, anchored in collaboration, informed by evidence, and guided by a responsibility to future generations.

As New Zealand approaches 2026, the question remains: will the country continue to rely on outdated thinking or embrace a forward-looking, just, and resilient transition that aligns economic ambitions with the well-being of its people, whenua, and climate? This sentiment is echoed by Prof. Sara Walton, tumuaki/head of department at Te Mātauraka Whakahaere/Department of Management, University of Otago.