Across the ditch

There are several significant sustainability announcements coming out of New Zealand in recent months, for the New Zealand Green Building Council there are two standouts to be most proud of.

New Zealand is hot on Australia's heels with the launch last week of its Net Zero Buildings certification. While Australia has had its version of this – the National Carbon Offset Standards – since 2017, building owners and portfolio managers in New Zealand can now get credit for their efforts to tackle their property emissions with a new pathway to net zero.

Also just out is the New Zealand Green Building Council's guide to ditching fossil fuels – another step towards helping commercial buildings transition away from fossil fuels and towards efficient, renewable energy.

The guide outlines key steps businesses can take to retrofit existing buildings to be all-electric, and details what technology is available to replace things such as natural gas systems with electric systems.

But it's New Zealand's ground-breaking methodology for calculating embodied carbon that is leading the way. This includes climate scenarios for construction and property organisations that help them assess and report their climate-related risks and opportunities.

The climate scenarios methodology is world leading, according to NZGBC chief executive Andrew Eagles.

No other country is doing it yet, Eagles says, and it's a significant milestone because it means property owners can now stress-test their organisations against the potential challenges and move towards ensuring properties are lower carbon emitting and more resilient.

The scenarios outline three pathways – orderly, disorderly and hot house – which present the risks and opportunities of climate change such as sea level rise and extreme weather events, and the implications for construction and property industries in the move to a net zero carbon economy.

Eagles says there have been some really good discussions around how to get properties to be lower carbon and more resilient.

"[These pathways are what] we as a construction and property sector have agreed are the potential risks that we are likely to face in the future and need to consider, as organisations, when dealing with those risks."

What makes the climate scenarios so interesting is that any asset holder that has more than $60 million in assets and is registered on the stock exchange must list their assets in their annual report and consider how at risk they are from climate change events and also in the transition to a low-carbon future.

"So, it's a really big deal; banks and insurers and property holders are doing that, so this work helps them consider those risks and opportunities."

The NZGBC says that since January this year around 200 of the country's largest companies and organisations have been required to start disclosing information about their climate-related risks and opportunities in line with climate standards.

And when you consider the impacts of higher degrees of warming there are significant impacts within the construction and property sector. For example, assets unable to withstand climate impacts or that are too expensive to insure will likely be left stranded, resulting in a financial impact on those property owners.

So the climate scenarios and detailed outline of the risks and opportunities allow the sector to take a consistent approach when working through their climate-related disclosures. This in turn will help these companies take more focused, and productive action to curb emissions, the council says.

The scenarios have been really well received, says Eagles.

"People like the analysis and they also like the process for coming together and considering these risks, so a number of the listed entities are already saying this is very useful for them because it makes it easier for them to now stress-test their businesses against these climate scenarios.

"In the report we’ve written that ‘this is what will happen with heavy rain events, and this is what will happen with temperature’ [and so on]… The other thing it's useful is that investors can more easily tell which organisations are listed because there is a common way forward: they’re all going to measure themselves against the same risks which means those who are doing less stand out more and those that are doing more also stand out more."

And while the journey has been well worth it, it has taken a bit of time to get everyone around the table, Eagles says.

"We had a leadership group which included ANZ bank, IAG Insurance, and listed property holders, and they figured out who should be on the technical working group. Most people volunteered their time but in order to do this well we had to agree about the scope."

The NZGBC's other big announcement is the launch of its methodology for calculating embodied carbon.

While Australia is still trying to work this through, New Zealand's put in about two years’ worth of work, talking with the sector and coming to an agreement about how to calculate a seemingly un-calculable concept.

But finally, the new Embodied Carbon Calculator was born. It provides what the NZGBC says is a robust and consistent approach for calculating upfront carbon and whole-of-life embodied carbon.

"What's been happening to date is, imagine you’re one engineering firm and then there's a construction firm and then there's an owner, and you’re all talking about a building or the way you design a building.

"Each of these uses different embodied carbon calculation methods and all come up with a completely different result, which makes it really hard to compare and make improvements and reduce emissions. And with embodied carbon making up about half the emissions of the construction property sector, it's really important… [but] no one even knew how to measure it before," says Eagles.

The path to agreement was slippery at times.

"There were lots of conversations with the sector – engineers and architects from around New Zealand –we had support from Thinkstep ANZ who held one-to-one meetings with concrete and steel and timber and many other providers.

"We discussed the decisions we had to make and what was a fair and really robust way to measure these and we made changes along the way."

Ultimately, the Green Star NZ Embodied Carbon Methodology provides clarity on significant issues, such as how to count the amount of carbon wood stores and credits for recycling/reusing materials, provides guidance on which building elements should be included in the calculation, and a database of carbon emission factors for common building products.

And there is a huge appetite from developers, architects, and builders to tackle their climate pollution.

There is a huge appetite from developers, architects, and builders to tackle their climate pollution

"Measuring is a vital first step, and we’re grateful to have had some of the industry's brightest and most passionate sustainability advocates supporting this work."

It helps that the current government, in the wake of Jacinda Ardern's departure, is maintaining the momentum. With any building over $9 million required to be built to 5 Green Star standards, they’re building lower carbon, more sustainable healthier buildings.

Eagles says the higher standards will also extend to housing through New Zealand's lower carbon, more sustainable housing standard Homestar.

It makes New Zealand "really progressive and supportive of green buildings on the buildings that they build [Green Star rating], on the buildings they lease [NABERs rating], and on the homes that they build [Homestar rating]."