Governance
Sustainable investment for the future
In June 2022 we signed an industry-first, Sustainability Linked Loan (SLL) with Bank of New Zealand. The loan sets out targets that are linked to our ALL IN (diversity, equity and inclusion) and WorldClimate (climate and environment) ambitions. It includes yearly key performance indicators (KPIs) through to FY25 based on our travel emissions reduction targets, our transition to renewable energy, and our gender diversity targets.
Setting these annual targets and tracking our progress through regular reporting has given us more accountability and helped us to embed clear goals into our decision-making and planning.
For example, to meet our target to reduce our travel emissions by at least 50% per FTE by 2025, we have established carbon budgets at a business unit level to assist our leaders and teams in making smarter choices when travel is required. We also have a goal to transition to 100% renewable energy, and the SLL has been valuable in bringing this target to the forefront and galvanising our teams to collaborate on the actions required to make this happen.
We’re proud to say that we met our first-year commitments in our Sustainability Linked Loan in FY23 and continue to focus on making progress towards our 2025 goals.
Sustainable finance is a relatively new development in capital markets, but we believe it is an important mechanism for change. The SLL was the first of its kind by a professional services firm in New Zealand and represents our long-standing commitment to social and environmental goals. We welcome the opportunity to continue this journey with ambitious targets.
Deloitte's commitment to responsible and ethical business is embedded in our policies, culture and decision-making. We believe that business has a purpose beyond profit and should play an essential role in improving society, including advancing economic opportunity and promoting fair business practices that build better futures for future generations.
For more than 175 years, Deloitte has been making a positive impact that matters for our people, society, and clients. Much of our client work aims to strengthen governance, from strategy to operational transformation, risk mitigation, value creation, and audit. As issues for boards become more complex and challenging, we continue to support boards, non-executive directors and leadership teams as they manage and mitigate risk and chart a path through uncertainty.
This year, we highlight our external partnerships with and eminence from the Sustainable Business Council and Toitu Toitū: Centre for Sustainable Finance, and our efforts as part of the Climate Leaders Coalition. We share news from our Reverse Mentoring programme of experienced and aspiring business leaders in Christchurch. We spotlight our analysis of the New Zealand Budget across key areas of tax, infrastructure, health and climate.
As always, we share progress and performance on our material issues, we're transparent in our disclosure of our social and environmental impact, and we include an update on our Sustainability Linked Loan commitments.
Transparency in reporting
Deloitte is dedicated to transparent reporting. Our purpose is to make an impact that matters, and we welcome the opportunity to hold ourselves accountable and report on our progress.
As a firm, we identify and evaluate our risks and regularly report on our material issues and ESG performance in several formats, including this annual Impact Report and on a global level, the Building Better Futures report. Our material topics also shape the firm's strategy as the defining opportunities for the future.
Globally we report our performance annually using the Global Reporting Initiative’s guidelines. Reporting includes the Task Force on Climate Related Disclosures (TCFD) as well as progress to the United Nations Global Compact representing activities of our global network of member firms. We received an A-rating from the Carbon Disclosure Project for our FY22 response to its climate change questionnaire.
Our environmental reporting and social impact reporting will undergo annual external assurance from FY23 and FY24, respectively (previously, both were audited internally).
The advantage of collaboration
Deloitte continues to host The Collaborative Advantage, which was founded in 2020 as a working group of sustainable and ethical sourcing practitioners. This growing network aims to help members meaningfully prepare for and respond to various ESG challenges through collaboration.
The Collaborative Advantage group has held over thirty monthly sessions, with agendas covering a range of topics and issues from company purpose and benefit mindset to ethical sourcing, climate change, human rights and modern slavery. Recognising that issues like modern slavery are more complex than any one business could meaningfully respond to alone, the group believes greater collaboration and shared learning can drive a sustainable transformation from within the New Zealand (and Australian) business communities.
Find out more about The Collaborative Advantage.
Elevating Ōtautahi Christchurch’s business ecosystem
Ōtautahi Christchurch’s business community is well-connected and many organisations readily share knowledge and resources amongst senior leaders and board directors. Our team at Deloitte Christchurch saw an opportunity to add to this through the establishment of a reverse mentoring initiative which would connect the region’s senior leaders and directors with people who aspire to one day be senior leaders themselves.
This initiative is different from traditional mentorship in that it's about building bridges between different generations and perspectives in the business world. Seasoned mentors, with their wealth of knowledge, are paired with mentees from diverse backgrounds and industries. The exchange of ideas, the melding of different perspectives, and the forging of connections is a new and refreshing mentoring style.
The programme isn’t just about personal growth; it's about elevating the entire business ecosystem. Future leaders are gaining invaluable insights from highly experienced leaders, helping them make better decisions, and understand the nuances of leadership.
On the flip side, the senior leaders are benefiting too. They're tapping into the fresh, innovative thinking of the next generation, and this dynamic exchange is a powerful catalyst for innovation and progress. Rather than prescribing a set programme of topics over the nine-month mentorship period, topics are decided month-to-month deliberately to create a focus on what is current and topical within the business community to ensure fresh perspectives.
Deloitte has created a movement that's fostering a culture of collaboration and growth in the Christchurch business community. It's proving that when experienced leaders and aspiring ones come together, they can build better futures.
Striking a balance for Budget 2023
Each year, Deloitte produces a commentary on the annual government Budget. However, in 2023 we took a different approach from previous years. We focused on having meaningful commentary in more bite-sized chunks, concentrating on the areas of most importance to our clients: tax, health, infrastructure and climate, as well as our popular 'budget at a glance' infographic.
For the first time, we hosted a post-Budget webinar, which over 400 Deloitte clients attended. We brought in Tim McCready as an external facilitator and discussed the considered reactions to the Budget by our panellists Tamarapa Lloyd (Māori outcomes), Robyn Walker (Tax), Louise Aitken (Sustainability & Climate), Norm Castles (Infrastructure) and Thorsten Engel (Health).
You can read our 2023 commentary 'Striking a balance', here.
The rise of artificial intelligence
Generative artificial intelligence (AI) has made a dramatic entrance into the business world with its low barrier to entry driving an increase in use and interest. This has enabled more businesses to trial using AI and become more AI-savvy in the process.
With responsible guardrails, Generative AI has the potential to drive dramatic results for our business and our clients. It could enable business shifts to different types of services, for example, quickly creating hyper-personalised content. It has the power to augment jobs, using AI as a colleague to accelerate human performance. It could also speed up product development and innovation by leveraging data.
To ensure our people and service offerings stay up to speed, we are leading internal initiatives to prepare our people for informed discussions with clients:
Cura Pathways – our learning management system, which provides curated content on generative AI and related topics from across our global Deloitte network
Townhall sessions – Generative AI 101 sessions with more than 600 people, providing our teams with a foundational understanding of the transformational technology and the potential impacts and risks
GenAI offerings – we have a set of Generative AI offerings in our Risk Advisory and Consulting business units for our clients.
To support our clients who have started, or are thinking about using Generative AI, we have facilitated five workshops for senior leadership teams on Generative AI and how to identify the most promising use cases for their organisations. In addition to these workshops, we have led 12 executive leadership briefings to support executive leaders and boards in their understanding of AI and what is possible in their sectors.
Read more thought leadership from our professionals:
Risks and guardrails for Generative AI in New Zealand organisations
Engaging our ecosystems to drive systemic change
We are active members of the Sustainable Business Council (SBC), New Zealand’s partner to the World Business Council for Sustainable Development (WBCSD).
In partnership with SBC and Toitū Tahua: Centre for Sustainable Finance, we offer tailored programmes for executive sustainability learning. We’ve also been commissioned as thought leaders to strengthen the ‘S’ in ESG, to support meaningful action on societal issues (both individually and collectively).
In addition, we’re proud to be a member of the SBC’s CEO-led Climate Leaders Coalition (CLC), whose mission is to accelerate New Zealand’s transition towards a thriving, zero-carbon and climate-resilient future. The CLC’s ambition is not only to reduce signatories’ emissions but to lead the way on climate adaptation and create the certainty that businesses and communities need to invest and transform.
Read the CLC report here on the group’s progress.
Leading the change; the role of the CFO
The Chief Financial Officer (CFO) plays a critical role in driving organisational strategy and performance and serves as a catalyst for transformation. Our CFO Sustainability & Climate programme and the annual CFO Sustainability Snapshot Survey are designed to help CFOs and the wider C-suite, understand how they can take the lead in managing climate change risk, empowering and enabling them to take action in their influential roles.
Hosted by Deloitte and the Sustainable Business Council (SBC), the CFO Sustainability & Climate Programme establishes a shared understanding of what we mean by ‘sustainability,’ what the critical challenges and opportunities are, and why they are important to CFOs and their key stakeholders. This foundation enables attendees to compellingly communicate the case for change. CFOs leave this highly interactive programme with a pathway forward to embed climate resilience and maximise opportunities for their business. Furthermore, they become members of a network of passionate, driven and high-performing CFOs who are empowered to navigate their organisations through the challenges and opportunities presented by climate change.
In 2022, Deloitte, the SBC, and Toitū Tahua: the Centre for Sustainable Finance, released the CFO Sustainability Snapshot Survey. The survey was designed to uncover New Zealand CFOs’ perspectives on sustainability and how organisations are progressing in sustainability activities. While sustainability progress appears to remain unchanged since 2021, the survey shares how CFOs can accelerate action, mainly through reporting.
Executive Director at SBC NZ, Mike Burrell, said sustainability is “moving from a nice to have, to being core to business strategy. For CFOs, this means that, along with the commercial side of things, this is what they need to be focussing on. Businesses around the world recognise this, and it’s really important for CFOs to have skills in the climate space and in sustainability more generally.’’
Supporting Boards of Directors to navigate climate risks
Climate risk is the defining business leadership challenge of our time, and the role of boards will prove crucial as organisations navigate a path to a climate-resilient future. They will be required to reconfigure their strategic and long-term operating models and to ensure that climate risk management informs strategic long-term decision-making.
In late 2021, climate-related disclosures became mandated for around 200 reporting entities in Aotearoa, who were required to begin reporting for the calendar year 2023. The External Reporting Board (XRB) was tasked with developing the reporting standards, which draw from the Taskforce for Climate-related Financial Disclosures (TCFD) – an international framework for reporting.
Our 2022 CFO Sustainability Snapshot Survey provided insights into the variable level of readiness amongst companies who are obligated to report. It notes that many entities that are not captured by the mandate have decided to voluntarily report.
In FY23, to support non-executive directors to better understand their role in managing and mitigating climate risk, Deloitte, in collaboration with Toitū Tahua: Centre for Sustainable Finance, and the Sustainable Business Council, brought together directors from a range of industries and sectors to participate in a series of five climate governance workshops.
From these sessions arose the Directors' Guide To Climate Governance, a quick reference guide to climate governance principles which summarises the valuable views, insights and guidance provided during the workshops.
Understanding our supply chain
As a professional services firm with local roots, nationwide presence and global reach, we rely on an ecosystem of businesses to deliver our services, manage our operations, and stay connected in our communities.
Risk-based due diligence is carried out on our local and global suppliers before they’re onboarded. As well as industry-specific requirements, we’re increasingly weighting social and environmental factors. For example, Deloitte expects global technology hardware vendors to be active members of the Responsible Business Alliance – the world’s largest industry coalition dedicated to corporate social responsibility.
All suppliers, including contractors and subcontractors, receive the Deloitte Supplier Code of Conduct. This sets out minimum expectations of suppliers’ business operations and supply chains, including legal compliance, labour rights, integrity and ethics, environmental responsibility and human rights.
Deloitte New Zealand engages with over 900 direct suppliers across categories like travel and transportation, real estate and office services, talent (human resources), technology, and business services, with the majority being based in New Zealand. Seventy five percent of our spending is with 50 suppliers.
This year, to spread awareness of our Supplier Code of Conduct and learn about our suppliers’ ESG initiatives, we invited our main suppliers to complete a self-assessment questionnaire. This gave us a better understanding of our supply chain and let us see which businesses have set science-based emissions reduction targets and which intend to. Our priority is to have 67% of our suppliers set science-based emissions targets by 2025.
Engaging with our suppliers also gave us an insight into their community engagement initiatives. For example: how Wakatipu Senior Citizens Association (our Queenstown landlord) creates a community for seniors with weekly programming and shared meals, and how Tribe (talent services) utilises Carbon Invoice to donate to tree planting initiative Trees that Count.
