ACC to decarbonise investment portfolio

ACC chair Paula Rebstock. Photo / Brett Phibbs

The Accident Compensation Corporation has announced a target to halve the carbon intensity of its $46 billion investment portfolio by 2030.

ACC chair Paula Rebstock said the targets acknowledge the changed ethics of New Zealanders seen in the bi-partisan support for the Zero Carbon Act and the country's commitment to reduce net emissions to zero by 2050.

"In managing its investments, ACC must balance the objectives of maximising returns to pay for the future costs of injuries while investing in a way that is ethically acceptable to New Zealanders," she said.

ACC said it may choose to "alter the ambition" of the targets as it gathers evidence of the costs and opportunities. The target may need to be adjusted to meet the five-year emissions budget the Climate Change Commission will set next year.

Carbon intensity in ACC's global equities portfolio has already fallen 19 per cent during the past 10 years as investment growth has focused on lower-carbon activities such as technology and services.

Already started

"ACC is not starting from scratch," chief executive Scott Pickering said. "We have already been decarbonising and reweighting the investment portfolio and made steady progress in reducing corporate emissions."

The portfolio's carbon intensity has been trending down by about 2 per cent per year and the investment fund said it will use its influence as a shareholder to push further climate progress.

This is bad news for some coal miners and energy companies. Any firm that earns more than 30 per cent of its revenue from thermal coal production has been excluded from any possible investment.

The corporation's announcement follows the passing of legislation yesterday to align the country's emissions trading scheme with the targets set by the Zero Carbon Act passed last year. The amendments impose a sinking lid on emissions covered by the scheme and future carbon budgets will be set by the newly established Climate Change Commission.

As part of that broader drive, ACC plans to cut 60 per cent of its corporate carbon emissions by 2025. This work began last year by reducing business travel and carbon emissions from its vehicle fleet.

Other agencies

New Zealand Trade and Enterprise (NZTE) today also committed to lower its carbon footprint by 46.2 per cent per employee in the next 10 years.

This means reducing annual emissions from the equivalent of 8.5 tonnes of CO2 per employee to 4.6 tonnes. The target aligns with New Zealand's Paris Climate Accord commitment to keep global warming well below 2C compared to pre-industrial levels.

"We know that this is the right thing to do and it reflects the fact that sustainability is part of good business for Aotearoa New Zealand, here at home and around the world," said Peter Chrisp, NZTE chief executive.

Long-haul air travel made up the majority of NZTE's carbon emissions in its baseline year as the organisation has 600 staff across 50 international locations.

The agency has begun reducing air travel and encouraging lower-carbon options. Remote working systems, put to the test in recent months during the Covid-19 lockdowns, are also reducing travel and associated carbon emissions.