Climate change is a hot topic everywhere these days, and ISO is no exception. Its Climate Action Amendment has been added as a requirement in all management standards, regarding both risk assessment and stakeholder needs.
This means it affects 9001, 14001, 45001, 27001, 22000 and 50001. Or in plain English, the standards for Quality, Environmental, Health & Safety, Information Technology, Food Safety and Energy Management.
But what does that mean in real terms?
When looking at your business risks / SWOT analysis you need to consider the effects of climate change and those can be many and varied.
First things first, you will need to consider legal requirements and in NZ that differs depending on the type of business and sector you work in, as you will see below.
- The Carbon Neutral Government Programme (CNGP), announced in December 2020, focuses on measuring and reducing emissions from core government departments and crown agents (including district health boards) to accelerate public sector emissions reductions.
- The Climate-related Disclosure (CRD) regime legislated in 2021 ensures the effects of climate change are routinely considered in business and investment decisions. It covers large banks, insurers, managers of investment schemes, and publicly listed entities.
- Under the Climate Change Response (Zero Carbon) Amendment Act 2019 (Section 5ZW) about 400 organisations that provide essential public services in New Zealand may be required to provide information on climate change adaptation. This information is required for New Zealand's National Adaptation Plan and future national Climate Change Risk Assessments.
These requests focus on how organisations are adapting to climate change-related hazards such as sea level rise, more frequent and intense extreme weather events, higher temperatures and more heatwaves, and more droughts and wildfires. Both the CRD regime and the power to request information under Section 5ZW are aligned with the TCFD framework.
For anyone else, it's currently voluntary to measure, monitor and improve sustainability related performance. Organisations can voluntarily report their greenhouse gas emissions using MfE's guidance for measuring emissions.
More information on all of these can be found on the Ministry for Environments website, so, particularly if you fit into one of the first three, it would pay to go and do some reading.
Your Customers:
That takes care of the legal requirements, but what about customer requirements? You will likely have already been approached by some key customers with questions regarding your climate related targets, improvement plans etc, but it would pay to keep an ear to the ground and make sure your sales team is aware of the shifting focus of their customers and how that might affect you as a business.
Pay special attention to overseas customers as there are big pushes there with requirements for reporting which includes their supply chain – that means you!
Your Market:
Be aware of market & consumer trends in your sector and where the focus areas are:
- use of recycled materials and recyclability of your products/packaging - % of recycled cardboard or plastic used, local recycling capability after use, compostable items and so on
- carbon footprint and using locally sourced materials
- sustainable production i.e. FSC forestry, soil safe organically grown ingredients
- use of sustainable energy
- it may be all of the above!
Local Effects:
As previously mentioned, things like rising sea levels, extreme weather events and temperature changes need to be considered and the effects of those can be very localised and specific depending on where you are in the country and what sector you work in, for example:
- Forestry- wildfires and droughts will be key
- Horticulture – droughts, flooding and extreme weather i.e. hail storms etc
- Coastal situated – rising sea levels and erosion
- Temperature dependent processes – energy use, spoilage
All of these things can have a devastating effect on your bottom line and ability to stay in business, so you need to be aware of, and addressing contingency plans for them, as part of your business risk analysis.
Supply Chain:
Another thing that's going to hit the bottom line is the effect all these things have on your supply chain.
Switching to sustainable energy, packaging, freight and so on will directly affect the costs of your raw materials, services and distribution.
Again, particularly if you have overseas supply chains involved, this can be significant so if that's a big part of your business, it would pay to be aware of the requirements or ask your key suppliers for their own climate change risk assessments as part of your supplier questionnaire.
It all sounds like a lot, but don't panic, the first thing to do is assess your risks and figure out where the big issues are, if any. Once you have an understanding of what might affect you and your business, you can start to make plans on how to address.
The only requirement from ISO is that you've done that much, you don't have to be a sustainability champion or climate change expert overnight!