22 November 2021
Submissions
External Reporting Board
By email: [email protected]
Climate-related Disclosures: Governance and Risk Management Consultation
Thank you for the opportunity to provide feedback on the draft Governance and Risk Management sections of the upcoming Aotearoa New Zealand Climate Standard 1: Climate- related Disclosures (NZ CS 1).
A little about who we are
Meridian is Aotearoa’s largest renewable electricity company. Our purpose is clean energy for a fairer and healthier world.
We produce energy from 100 percent renewable sources (wind, water and sun). Our hydro stations and wind farms generate enough electricity to power around 1.7 million and 200,000 homes respectively each year. We are also a major electricity retailer through our Meridian and Powershop brands. In Australia, we own two wind farms and three hydro stations. We also have an energy retailing software company, Flux Federation, that operates in New Zealand, Australia and the United Kingdom. We also own Dam Safety Intelligence, which is focused on the safe management of dams and other water infrastructure.
We are committed to meeting future energy needs with renewable energy and taking action on climate change. Some of our current projects include construction of a new wind farm (Harapaki in the Hawke’s Bay), investment in a nationwide network of Electric Vehicle chargers, and a proposal to build the world’s first large-scale green hydrogen plan in Southland.
Our experiences so far in climate reporting
We have been early and enthusiastic adopters of climate and sustainability reporting. As a generator of renewable electricity, we make a meaningful contribution to national and global climate goals. Sustainability is at the core of what we do. It is clear to us that the impacts of climate change in New Zealand and globally will be devastating without strong climate action by government, business and society. It is essential to us that we are open and proactive
|
Meridian Energy Limited |
Level 2, 55 Lady Elizabeth Lane |
Phone +64-4 381 1200 |
|
PO Box 10-840 |
Fax +64-4 381 1272 |
|
|
Wellington 6143 |
||
|
New Zealand |
about the impacts on our business, as well as the impacts on others. Our climate disclosures have played a key role in this.
We think that alignment with global frameworks (such as the Task Force on Climate- related Financial Disclosures (TCFD) framework) is essential
Climate change is a global challenge, and therefore global solutions need to be developed. We think that climate disclosures will be most effective when they are well aligned with existing frameworks. This will help to ensure comparability for disclosure users, and make the framework simpler to apply.
Meridian operates in both New Zealand and abroad. Given the nature of our business and our focus on renewable energy, we are a compelling proposition for investors (both overseas and domestic) looking for green investments. Along with the XRB’s disclosure standard, it is likely that we will also need to align with international standards, such as the TCFD framework. In addition, the Intergovernmental Panel on Climate Change (IPCC) work in developing climate scenarios provides a well-known base from which to inform our disclosures.
As an entity that looks to attract both domestic and international investors, clear and transparent disclosures that align with recognised, existing frameworks are key. One way of doing this could be to give entities the option of complying with either the domestic framework or a recognised international disclosure framework, such as the TCFD. Another option could be to ensure that disclosure requirements are consistent with the TCFD guidance. Our strong preference is to not be required to prepare multiple different disclosures on the same topic.
We also support consistency of language between global and domestic frameworks.
We support transparency and accountability, and encourage disclosures that reflect this
The drafts have a strong focus on the responsibilities of managers in understanding and responding to climate-related impacts. We encourage this and believe that disclosure on actions taken are equally important. We support the intent of demonstrating strong commitment to climate goals, and accountabilities and incentives being linked to climate action. A focus on individual remuneration and responsibilities potentially conflicts with other principles such as privacy which we caution. We think that the requirement to set out an organisational structure in disclosure 5(b) risks being too prescriptive, if on balance with other broader business risks and opportunities of a similar scale, it introduces an unbalanced disclosure requirement on a materiality basis.
The definition of primary users of climate disclosures should be expanded to include groups that will be affected by the actions of entities
The definition of primary users is currently focused on those that allocate capital, and therefore need good information to be able to assess risk and impose market discipline. We think that a better definition of primary users would be a broader one, which takes into account those who are impacted by the actions of entities, at both a practical and financial level. We think that employees, iwi and local communities should be recognised as primary users. Although they may not hold capital, they are significantly impacted by the climate actions that entities take. We expect that recognising these groups as primary users would not substantially change the draft standards, but we think there is value in recognising groups that are directly impacted by climate action (or inaction).
2
Meridian Submission – XRB Climate-related Disclosures: Governance and Risk Management Consultation – 22 November 2021
Conclusion
Meridian is highly supportive of mandatory climate disclosures. We would like to commend the XRB for leading this consultation and look forward to the next round of consultation in March 2022.
Nāku noa, nā
Tina Frew
Head of Sustainability
Evealyn Whittington
Senior Regulatory Specialist
3
Meridian Submission – XRB Climate-related Disclosures: Governance and Risk Management Consultation – 22 November 2021
Appendix A: Responses to consultation questions
|
Question |
Response |
|||||
|
1. |
Primary users have been identified |
We agree that all of these users should be |
||||
|
as existing and potential investors, |
included, but also think that this definition |
|||||
|
lenders and insurance underwriters. |
should be broadened to include those |
|||||
|
Do you think that all of these users |
impacted by an entity’s climate actions: iwi, |
|||||
|
should be included in the primary |
local communities, employees. |
|||||
|
user category? |
||||||
|
2. |
Do you think the proposed |
Yes. |
||||
|
Governance section of NZ CS 1 |
||||||
|
meets primary user needs? |
||||||
|
(a) Do you think that the |
||||||
|
information provided under |
||||||
|
this section of NZ CS 1 will |
||||||
|
provide information that is |
||||||
|
useful for decision making to |
||||||
|
primary users (existing and |
||||||
|
potential investors, lenders |
||||||
|
and insurance underwriters)? |
||||||
|
If not, please explain why not |
||||||
|
and identify any alternative |
||||||
|
proposals. |
||||||
|
(b) Do you consider that this |
Yes. |
|||||
|
section of the standard is |
||||||
|
clear and unambiguous in |
||||||
|
terms of the information to be |
||||||
|
disclosed? If not, how could |
||||||
|
clarity be improved? |
||||||
|
(c) Do you consider that this |
We think that the proposed Governance |
|||||
|
section of the standard is |
section of NZ CS 1 is comprehensive. |
|||||
|
adequately comprehensive |
However, we think that disclosure 5(b) |
|||||
|
and achieves the right |
becomes too prescriptive. This is because it |
|||||
|
balance in terms of |
could require an unbalanced disclosure |
|||||
|
prescriptiveness and |
requirement, relative to other broader business |
|||||
|
specificity? If not, what should |
risks and opportunities, which are provided on |
|||||
|
be removed or added to |
a materiality basis. |
|||||
|
achieve a better balance? |
||||||
|
4 |
||||||
|
Meridian Submission – XRB Climate-related Disclosures: Governance and Risk Management Consultation – 22 November 2021 |
|
3. |
Do you think the proposed Risk |
Yes. |
|
Management section of NZ CS 1 |
||
|
meets primary user needs? |
||
|
(a) Do you think that the |
||
|
information provided under |
||
|
this section of the standard |
||
|
will provide information that is |
||
|
useful for decision making to |
||
|
primary users (existing and |
||
|
potential investors, lenders |
||
|
and insurance underwriters)? |
||
|
If not, please explain why not |
||
|
and identify any alternative |
||
|
proposals. |
||
|
(b) Do you consider that this |
Yes. |
|
|
section of the standard is |
||
|
clear and unambiguous in |
||
|
terms of the information to be |
||
|
disclosed? If not, how could |
||
|
clarity be improved? |
||
|
(c) Do you consider that this |
The proposed Risk section of draft NZ CS 1 is |
|
|
section of the standard is |
comprehensive and balanced. |
|
|
adequately comprehensive |
||
|
and achieves the right |
||
|
balance in terms of |
||
|
prescriptiveness and |
||
|
specificity? If not, what should |
||
|
be removed or added to |
||
|
achieve a better balance? |
||
|
4. |
The XRB has primarily drawn from |
We strongly support alignment with existing |
|
the TCFD’s definitions for its defined |
frameworks, especially the TCFD, as this is |
|
|
terms. Do you agree that we should |
widely adopted and well understood. |
|
|
align closely with the TCFD’s |
||
|
definitions? |
||
|
5 |
||
|
Meridian Submission – XRB Climate-related Disclosures: Governance and Risk Management Consultation – 22 November 2021 |
Disclaimer
Meridian Energy Limited published this content on 22 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2021 21:29:09 UTC.
Publicnow 2021
|
|
|
|
|
|
|
||||
|
||||
Technical analysis trends MERIDIAN ENERGY LIMITED
| Short Term | Mid-Term | Long Term | |
| Trends | Bearish | Bearish | Bearish |
Income Statement Evolution
|
Sell  Buy |
|
| Mean consensus | HOLD |
| Number of Analysts | 5 |
| Last Close Price | 4,77 NZD |
| Average target price | 5,46 NZD |
| Spread / Average Target | 14,4% |
