By Pii-Tuulia Nikula & Sara Walton*
Air New Zealand’s recent decision to abandon its short-term climate target raises the question of how many other businesses might follow.
The airline withdrew from the Science Based Target initiative (SBTi), the leading global body for the private sector to set and validate climate targets.
SBTi currently lists 24 New Zealand businesses which have set at least some targets and 11 which made a commitment but are yet to set or have their targets validated.
Most of the New Zealand businesses with targets are large companies in industries such as telecommunications and electricity generation. Other examples include well-known businesses such as Fletcher Building, Fonterra, New Zealand Post, and Ports of Auckland.
The case of Air New Zealand
Air New Zealand’s 2030 target aligned with the Paris Agreement goal to keep warming below 2°C (but not the more ambitious 1.5°C goal). The airline proposed to reduce its “well-to-wake” jet fuel emission intensity by 28.9%, the equivalent of a 16.3% absolute reduction compared to its 2019 base year.
Air New Zealand is not the only company failing to meet its SBTi commitments. Numerous businesses have failed to set net-zero targets after making a commitment, including the likes of Microsoft, Unilever and Procter & Gamble. Other airlines have had their SBTI commitments removed.
Silver Fern Farms and Kiwi Property Group are examples of New Zealand businesses with expired commitments. SBTi makes it easy for companies to make a commitment and some may only realise the practical challenges of meeting their climate targets during the two years they have to set and validate them.
Other New Zealand businesses, such as Auckland Airport, seem to have withdrawn from SBTi with less media attention after setting targets. The Auckland Airport company’s website states it is still committed to meeting science-based targets, so leaving SBTI does not necessarily indicate an organisation is abandoning climate goals.
![A check-in board in an aiport](https://images.theconversation.com/files/612777/original/file-20240810-19-2hxnvz.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip)
Absolute emission cuts can be hard if business growth remains an objective. Airlines have bounced back following the COVID pandemic, with the largest number of flights on one day recorded on July 6 this year.
Air New Zealand says it remains committed to decarbonising and reaching its 2050 net-zero target. However, making only long-term commitments without science-based best practice is problematic. How are current leaders held accountable for Air New Zealand achieving or failing a 2050 goal?
Airline decarbonisation is built heavily on massive but unproven technological leaps, such as electrification and new aviation fuels. Reaching the 2050 target could involve large amounts of offsetting, rather than genuine emission reductions.
Limitations and shortcomings
To set SBTi climate targets requires organisations to calculate their emissions, including those in the value chain, and set targets to reduce them in line with the Paris Agreement goals.
Targets can be short and long-term and either based on generic methodology or sector-specific pathways. The SBTi dataset currently includes around 9,000 organisations worldwide, of which more than 5,800 have approved targets.
SBTi’s methodology has attracted academic interest and criticism. Limitations of the scheme include shortcomings of the methodology to calculate science-based pathways or questions around how we can set emission budgets for individual businesses.
The methodology also fails to account for global inequalities. For instance, companies in developed countries may need to set even more ambitious goals so that those in developing countries can continue to grow. As SBTi both sets and verifies targets, it has also been criticised for lacking independence.
An SBTi monitoring report based on 2022 data highlights both limited transparency and mixed ability of businesses to achieve their targets. Other New Zealand research and analysis reported mixed results in organisational decarbonisation.
The future of science-based targets
SBTi is now in the process of reviewing its corporate net-zero standard. In April, the SBTi board released a statement in support of allowing businesses to use carbon credits towards some of their reduction targets. However, a pending revision of its corporate net-zero standard suggests this is unlikely.
With the changes to the SBTi process and announcement by Air New Zealand, it feels we are at a crossroads. Businesses are betwixt and between whether they should be ambitious and set climate targets they may not achieve, or play it safe and only promise incremental progress, not helping to meet global climate goals in time.
What does it mean if industries cannot find feasible pathways to achieve rapid and deep decarbonisation? Some companies need to start rethinking their business models to ensure they can play a meaningful role in the low-carbon transition.
No matter what position businesses take, we need to make sure they disclose their progress. In New Zealand, the new climate disclosure requirements make it easier to track progress of some of the largest listed companies and financial institutions, but many other businesses provide limited public transparency.
A current project to publish the climate efforts of a group of New Zealand businesses will release the scores in September. The aim is to increase public awareness and accountability of some of the country’s key emitters.
Similar efforts are operating across the globe to keep businesses involved in SBTi and other climate target schemes accountable for their promises. Ultimately, the integrity of global climate action depends on ensuring climate targets are not only aspirational but also attainable and grounded in scientific reality. Therein lies the challenge.
*Pii-Tuulia Nikula, Associate Professor, School of Business, Eastern Institute of Technology and Sara Walton, Professor of Sustainable Business, University of Otago.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
23 Comments
The upfront 'embodied carbon' in aircraft manufacturering and airports is significant, but using a lifecycle analysis approach, would be smoothed over the 20-50 year expected useful asset life. The material emissions come from operations - principally fossil-based jet fuel
Air New Zealand’s recent decision to abandon its short-term climate target raises the question of how many other businesses might follow.
Likely to be all businesses as cost to change over is prohibitive. There is not enough cash to convert.
Best bet is to continually upgrade machines, vehicles, ships, planes etc as new models are more fuel efficient.
We are not going to hit any climate targets and they will all be modified, pushed back or abandoned.
For example, The UK has an agressive EV roll out program that culminates in NZ$30k tax added to an ICE vehicle by 2035 soon to be 2030 under Labour. However EV sales have stalled and they are already way behind targets. They just don't suit so many people, not enough charging facilities, 66% of vehicle owners cannot access home charging etc.
I like EV's but the infrastructure is woeful. Charging facilities for a single vehicle in Thames, the gateway to the Coromandel. What a joke that is, sitting there waiting an hour for the 3 cars ahead of me so I can make it.
I can't understand why all the fuel companies arn't agressively adding EV chargers to their stations. Its not like they make much on fuel anyway, it's all about getting people to spend on drinks and food. EV drivers are significantly more likely to do that. And they should be fast chargers, the more EV drivers you turn over, the bigger the spend on things in store.
To demand I'd add space.
Interestingly, the Z service station at the intersection of Jackson Street and Hutt Road evicted the tenant in the large workshop on the side of their forecourt to build chargers. This was back in February 2024. A friend drove past a couple of days ago and informed me that the area is no further on from when the building was demolished and the rubble cleared away. So no rental income and no charger income. There are a couple of Charge Net chargers on the same property and, apparently, they aren't overwhelmed with users.
Been using an EV for my daily commute for 7 years, done over 100'000 km still using the original battery and charging overnight on a normal plug. Sure the range is limited but every km costs me 4 cents in electricity and 8 cents in RUC. My old Honda cost me 32 cents a km with out a RUC. As the asking price of EV's drops more people are going to get one. Who doesn't want to reduce their energy bill.
Of course the real win is reducing our trade deficit, we loss billions of dollars importing fossil fuel.
Even as somewhat of a net zero skeptic, I'm a big fan of EV's. They are a superior drive and cheaper to run though I'm not sure that the depreciation won't eat into that somewhat. The issue is the charging infrastructure when you are on longer trips, it all breaks down when there are queues for charging trust me. Ideally families should have an ICE and an EV.
A Tesla would get you to the Coromandel comfortably? So would many others. My current hang up with an EV as the main vehicle is that it doesn't tow the boat :)
However we currently run a fleet of three, cheap EV commuter, diesel family hauler and tow wagon, petrol toy/sports car. The EV does the most kms of the three and I prefer driving it to the diesel.
Eventually, I'd like to cut down to an EV family hauler/tow wagon and a sports car as I don't think any EV will ever replace a manual gearbox and high-revving engine for me personally.
Edit sorry TK, I'm making my assumption based on me, who lives in Auckland. Don't know where you're coming from.
Air New Zealand could easily meet it's emissions targets by moving passengers from aircraft to high-speed electric rail.
Flying is just too inefficient, even with untaxed aviation fuel and government subsidies for every bump in the road returns are razor thin. The first step would be to tax aviation fuel at the same rates as general vehicle fuel to create the economic incentive to switch transport modes.
Some airline flights in Europe are trains. Usually connecting services from smaller centres to large airports , with a station in the airport.In London you could check in /check your bag at Victoria station , then take the first class train to Gatwick.
It could work in NZ , once we have suitable trains. Tauranga could be a fast train to Hamilton/ Auckland airports Timaru to CHcch, Invercargill to Dunedin, or train/bus to Queenstown..
Wanganui to Palmerston north , Kapiti coast could also link to palmy. Palmerston could probably poach a fair bit of Wellingtons traffic , if there were fast trains available.
Silver Fern Farms and Kiwi Property Group are examples of New Zealand businesses with expired commitments
Remember that SFF was selling beef under the claim 'Net Zero by Nature'. So it seems that if that claim cannot meet benchmarks, it will be surprising if any beef production can.
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