Business Unit Reports People, Safety and Risk continued
ENVIRONMENTAL MANAGEMENT// Vector has continued to achieve the milestones in our FY16 to FY19 Environmental Strategy. In FY18 we successfully maintained ISO14001 certification of our environmental management system, expanded our GHG emissions reporting, completed environmental monitoring plans in all our businesses, undertook a review of our waste management activities and set our first carbon reduction target. We have continued to address gaps identified in our initial environmental gap analysis with 97% of actions now complete. We have also focused on raising environmental awareness through delivery of carbon and environmental e-learning modules to more than 80% of our people. For the FY18 year we have expanded our reporting on GHG emissions to include our most material scope 3 emissions (generated from business travel and fuel consumption by our network field service providers). Our scope 1 emissions have increased by 9% from FY17. This rise is the result of increased production volumes at the Kapuni Gas Treatment Plant which we are unable to control. Scope 2 emissions have decreased by 8% due to lower electricity transmission losses. Successful initiatives undertaken during the year to reduce greenhouse gas emissions included: • Completing the transition of our corporate vehicle fleet to 100% electric or PHEV vehicles • Completing an upgrade of our air-conditioning systems and IT servers in our head office resulting in a 66% reduction in electricity usage for this equipment • Solar installation on two further substations. To engage our people and signal the increasing importance of climate action for our business we set a modest target of 10% reduction in carbon intensity of our corporate carbon emissions for the year. We achieved the target with a 14% reduction in intensity (reduction in absolute emissions was 15% or 200.84 tonnes CO 2 -e). This covers business travel, fleet fuel use, and electricity consumption across our offices – activities that all of our people can influence in some way. This target is part of the short term incentive for all employees creating a financial imperative for action. We received one environmental infringement notice from Auckland Council during FY18. This occurred when a contractor, while working on an excavation, inadvertently pumped sediment laden water from a trench into the stormwater drain. A detailed investigation was completed, which resulted in the contractor’s environmental management procedures being updated and employee awareness training undertaken. n
ACTION ON CLIMATE CHANGE// Climate change is being recognised as an economic issue with real costs but also offering opportunities for businesses that are embracing a clean energy future. Vector has taken a significant step forward by making an ambitious commitment on reducing greenhouse gas emissions and improving our understanding of climate change impacts as part of our commitment to climate action. In 2017 Vector announced a commitment to achieve net zero carbon emissions by 2030. This acknowledges that while 2050 is the proposed target for the country, early action will avoid significant costs in the future. The commitment to net zero carbon has been supported by a range of leadership action. Our Group Chief Executive has co-led a leadership group from the business community on climate action which culminated in the creation of a Climate Leaders Coalition. The Coalition is committing to emissions reduction in line with the Paris Agreement. Vector has also brought two important thought leaders to New Zealand – Professor Will Steffan and Simon Corbell, who spoke on the science of climate change and the experience of the Australian Capital Territory in tackling climate change. To help spur practical action at a city level, Vector sponsored and actively participated in Auckland’s first Climathon, hosted by the University of Auckland. This 24-hour hackathon exposed participants to design thinking processes and they emerged with a number of concepts for reducing emissions. Vector supported the inaugural New Zealand Sustainable Development Goals (SDG) Summit this year through sponsorship and by contributing to the business session. In addition, over the last year Vector has also completed two major pieces of work to understand the impacts of climate change on the business. The assessment of physical impacts was focused on the Auckland electricity and gas networks and has been used to inform the latest Asset Management Plans for both networks. The modelling of transition impacts to a two degree world was economy-wide, recognising Vector’s exposure to a range of sectors and interdependence with a number of key areas of decarbonisation such as EV and solar uptake. There are clear financial implications for the business from both the transition to a two degree economy and the physical impacts on assets. Vector is following the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to guide disclosure on how we are responding to climate change. As part of this, Vector has submitted a climate response to the Carbon Disclosure Project (CDP). At a regulatory level, Vector has been actively engaged in the Productivity Commission inquiry into the Low Emissions economy and early consultation on the proposed Zero Carbon Bill.
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