Deloitte’s commitment to responsible business is rooted in our purpose. Despite the challenges and uncertainties of the past year, we’ve strengthened our credibility and trust with stakeholders by consistently living our purpose.
For more than 175 years, Deloitte has been committed to responsible business practices, making a positive impact that matters for our people, society, and clients. This year, we reached out to suppliers on critical topics and customised sustainability education for senior finance executives in leading New Zealand businesses.
In addition, we’re supporting our clients as they strive towards more purpose-driven business practices that go beyond the direct impact of everyday business. We’re seeing an increased appetite for positive change with topics like social impact, diversity, sustainability and climate change moving to the top of every board’s agenda. Deloitte New Zealand continues to work hard to share our values and support boards and leadership teams as they build capability and look to deliver solutions to society's difficult problems.
“One of Deloitte’s roles as a professional services provider is to help our clients understand their own exposure to challenges and opportunities, and to use our local professionals and our extensive global network to develop dynamic solutions; which we cannot do authentically, unless we have our own house in order.”
Chair, Deloitte New Zealand
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Supplier Code of Conduct
Deloitte is committed to responsible business practices. We aim to achieve positive outcomes for our people, our communities, the economy and the environment. At Deloitte New Zealand, we acknowledge the Māori people as tāngata whenua of Aotearoa and embrace the principles of Te Tiriti o Waitangi, respecting the important influence Te Ao Māori has on how we conduct business and how we engage with others. This includes our Supplier Code of Conduct, which outlines how we can work together to support sustainability through inclusive procurement practices in New Zealand. We recognise our suppliers play a critical role in helping us to achieve this commitment. Our Supplier Code sets out minimum expectations of suppliers’ business operations and supply chains, including legal compliance, labour rights, integrity and ethics, environmental responsibility, and human rights. The code is publicly available online.
We also invite our suppliers to work with us towards aspirational targets. These include science-based emission reduction targets and creating opportunities for people from underrepresented groups. For example, in May 2022, we asked select suppliers for feedback about the New Zealand Government’s consultation on Modern Slavery and Worker Exploitation. This feedback helped to inform our approach as a firm. And, with experts from across the business, we wrote a letter to the Ministry of Business, Innovation and Employment to show our support and share our feedback. We believe legislation focused specifically on modern slavery and worker exploitation is necessary to galvanise focus on this complex and structural societal challenge. Through our Supplier Code of Conduct and other initiatives, we’ll continue our commitment to the values which inform and guide our behaviour and unite us across the Deloitte network.
Climate related disclosures
New Zealand’s reporting standards authority, the External Reporting Board (XRB), has completed its third and final consultation on a proposed climate-related disclosure framework for New Zealand. We expect there will soon be standards for relevant entities in New Zealand, including many of our insurance clients.
Some of our clients have already begun to publish climate-related disclosures based on the Task Force for Climate-related Disclosures (TCFD) 2017 recommendations. These are currently Australia-centric, but we’re hopeful the XRB’s consultation process will help bring a New Zealand focus. In FY22, Deloitte’s Actuarial & Insurance Solutions (AIS) practice contributed to a draft paper by the Climate Risk Task Force of the International Actuarial Association (IAA). The IAA is conscious that actuaries and other stakeholders need guidance. Darren Fleming, Associate Director and an experienced senior actuary in our team, has been actively contributing to this thought leadership. The paper, published in October 2022, discusses climate-related disclosures and how climate-related risk can be integrated into Enterprise Risk Management (ERM) practices.
The intent is to help actuaries (and others) understand the principles and practices for preparing climate-related disclosures, and how they can be used to inform risk management processes. Further to this, Deloitte will be a gold sponsor of the International Congress of Actuaries (ICA23) in Sydney. Our Asia Pacific firm’s actuarial community has rallied behind the congress. Teaming up with actuaries from our Swiss firm, they’ll present on how sustainability and climate considerations increasingly inform financial supervision. The incorporation of Environmental, Social and Governance (ESG) risks into prudent capital requirements for banks, insurers, and pension funds is only a question of ‘when’ and ‘how’. Our actuaries’ presentation will aim to inform and contribute to this debate.
An invaluable programme for CFOs
Deloitte recognises Chief Financial Officers (CFOs) play a critical role in driving organisational strategy and performance. CFOs must have the tools – and feel empowered – to embed climate resilience and maximise opportunities in business. In partnership with the Sustainable Business Council (SBC), we developed a Climate & Sustainability Programme to upskill CFOs on this pressing topic in FY21, and programmes ran throughout FY22.
The programme empowers CFOs to take action and bring sustainability principles into their influential roles. Participants recognise their role as custodians of sustainability reporting and see how they can take the lead in managing climate change risk.
Jayesh Rama, a director in Deloitte’s Finance and Performance Consulting practice, observes that the programme also enables participants connect with peers who are navigating the unique challenges in their CFO role. “For CFOs focused on business performance targets and strategic outcomes, building networks and collaborating with peers is critical in addressing the challenges and realising the opportunities related to climate and sustainability.”
Communities for positive climate action
The Aotearoa New Zealand Investor Coalition for Net-Zero is an initiative that aims to encourage demonstrable progress toward credible Net-Zero by 2050 commitments among New Zealand investors and asset owners. It asks them to make, and report their progress toward, international Net-Zero pledges.
The coalition’s founders are Toitū Tahua: The Centre for Sustainable Finance, Mindful Money and the Investor Group on Climate Change. Supporters include the Sustainable Business Council, Sustainable Business Network, Toitū Envirocare and Responsible Investment Association Australasia. The coalition raises awareness, reports on collective progress and signposts learning and collaboration opportunities, as well as service providers that can help with Net-Zero strategies.
Amy Sparks, an associate director in the Corporate Finance team at Deloitte, facilitates monthly meetings and connects the community with guest experts. Twenty-five practitioners from across the New Zealand asset owner and management community, including some of the largest organisations, share resources and discuss best practices to enable progress toward their pledges.
A remarkable gift
The Jardine family has owned a 900-hectare working farm at the foot of the iconic Remarkables mountain range near Queenstown for 100 years. Dick and Jillian Jardine were searching for a custodian to ensure the beauty of the land and its flora and fauna would be protected for decades to come.
Click here to read about how Deloitte helped the family transfer ownership to an independent charitable trust.
Climate change governance workshop
In February 2022, Deloitte New Zealand and other organisations gathered with some of Aotearoa’s leading non-executive directors for a practical workshop on climate risk governance. The two-hour session was a pilot, designed to share knowledge and upskill directors in effective climate governance practices. Hosted by the Institute of Directors in New Zealand, the workshop was facilitated by Toitū Tahua, Sustainable Business Council NZ, Deloitte and Chapter Zero New Zealand.
The workshop responded to draft climate risk governance and management standards from the External Reporting Board (XRB). Aotearoa New Zealand Climate Standard 1: Climate-related Disclosures (NZ CS 1) is a new climate-related disclosure framework for New Zealand.
Chapter Zero is part of the global Climate Governance Initiative, a collaboration with the World Economic Forum, which has developed principles on effective climate governance that we can draw inspiration from. Deloitte also published a follow up article on climate change governance. Directors play a key role in building a resilient future and need to stay on top of the evolving climate risk governance and management standards. The workshop was designed to build this understanding and demonstrate how effective climate governance practices can be applied.
Accelerating AI governance in Aotearoa
There’s a growing demand for applying artificial intelligence (AI) in New Zealand businesses. But, as demand grows, so too does the need for strong ethical frameworks. A 2019 Deloitte poll on the state of AI in enterprise revealed that organisations are doing governance ad hoc and there’s a lot of confusion around best practices. Maturity assessments often reveal organisational pain points that are a direct cause of not having data governance. To grow AI capabilities, businesses also need robust data management. New Zealand is still in the early stages of developing AI governance but we’re seeing increased interest from businesses wanting to provide more transparency and accountability in the use of data and AI. Globally, there's been similar approaches, with an emphasis on protecting human rights and abiding by the rule of law.
Following an AI Forum in 2020, Deloitte began developing its own framework called Trustworthy AI™. Later the same year, a charter for the government’s data system, the Algorithm Charter for Aotearoa New Zealand, was released. In 2021, a new course on the subject, Managing with AI, started at the University of Auckland Business School. Deloitte was invited to speak on AI Governance, so Anthony Williams and Isidora Labra Odde from the AI and Data team and Maggie Zheng and Mariette van Niekerk from Risk Advisory-Forensics went along.
The team covered a wide range of discussion points, from policy to tools, and current challenges and concerns. They shared Deloitte’s four key pillars for successful strategic adoption of AI (value, architecture, workforce, governance) and explored tools and use cases. The team received positive feedback from students and were invited to present the again in 2022. It’s a fantastic opportunity to help share the talent coming out of universities and to accelerate AI governance policy in New Zealand.
Women in the boardroom
Globally, women are underrepresented in the boardroom. In New Zealand, women hold 31.9 per cent of board seats, placing us in the top ten countries for representation. But more still needs to be done. New Zealand has a very low number of female CEOs and there’s a high number of directors holding more than one board seat – limiting the diversity of thought at board tables across the country.
The seventh edition of the Deloitte Global Boardroom Programme's Women in the Boardroom looks at the representation of women on boards and highlights what still needs to be done to increase diversity at the highest leadership levels.
Click here to read the full report.