Our Approach to Sustainability
Sustainability is important to Trustpower and we are on a path of continuous improvement.
Our internal and external stakeholders have helped us identify seven measurable sustainability parameters. These not only align with our company strategic aspirations, but also with the United Nations Sustainability Development Goals.
For each of the parameters we have a process to monitor compliance in relation to our legal obligations and internal policies. Senior Leadership oversight ensures we are making meaningful and tangible progress on our path to improving the sustainability of our practices and our business.
Our actions and commitments in relation to the varying parameters are integrated throughout this report, and we will be adding to this work and reporting more in future years.
Taskforce on Climate-related Financial Disclosures (TCFD)
Climate change is happening. Investors and stakeholders are becoming increasingly interested in what companies are doing to mitigate and adapt to climate risks and opportunities. In 2020, the government flagged an intent to make climate-related disclosures mandatory for publicly listed companies by 2023. It will require these businesses to report against their climate-related financial risks and opportunities using a framework known as the Taskforce on Climate-Related Financial Disclosures (TCFD).
With respect to our climate risk profile, this year we are voluntarily reporting on around 70 per cent of the TCFD Framework, with the intention to build on this year on year.
Climate Change Governance
In 2020, our major shareholder Infratil released a Climate Change Position Statement. We are strongly aligned with this position. We are working to understand what this means for our business and are committed to being transparent with our stakeholders about climate change risk and opportunity.
Our Governance is explained on the Risk & Opportunity page.
Metrics and Targets
To ensure Trustpower is abreast of changes and understands its climate-related risks and opportunities, we measure and monitor the following:
– Frequency and intensity of extreme rainfall events
– Electricity demand
– Price volatility
– Probable Maximum Flood (PMF) assessments
– Greenhouse gas (GHG) emissions
– Meet all TCFD mandatory requirements by FY23.
Greenhouse Gas Disclosures
Trustpower has been measuring its emissions across FY20 and FY21. Our reporting and measurement covers Scope 1 and 2, and some of Scope 3 emissions. This financial year we have gathered data on the Scope 3 categories we deemed most material to the business. We intend to explore more of Scope 3 in the future.
Adapted from the Greenhouse Gas (GHG) Protocol, our emissions have been classified under the following categories:
Direct GHG emissions (Scope 1): emissions from sources that are owned or controlled by the business e.g. our generation.
Indirect GHG emissions (Scope 2): emissions from the generation of purchased electricity e.g. our electricity bill.
Indirect GHG emissions (Scope 3): emissions that occur because of the businesses activities but from sources not owned or controlled by the business e.g. travel and waste.
Trustpower’s overall emissions are largely made up of Scope 1 emissions, primarily due to fuel consumption associated with Bream Bay diesel peaking station. This asset provides fast-start power generation for times when New Zealand’s electricity supply is weak due to low inflows or wind. Corresponding market prices encourage this form of generation to ensure the supply of power is secure and uninterrupted.
Scope 1 accounts for 86.9% of Trustpower’s overall emissions, with Bream Bay accounting for 76.2% of Trustpower’s overall emissions. Scope 2 purchased energy emissions account for 9.7%, with Scope 3 accounting for 3.4%. See figure 1.
Our Scope 3 emissions are significantly reduced in FY21 due to forced travel restrictions during Covid-19 lockdown periods. These low-travel behaviours have continued to be adopted as standard practice by our people.
Trustpower uses tonnes of carbon dioxide released per kilowatt hour of energy produced to measure its emission intensity. This metric is widely used throughout the electricity generation industry. This year Trustpower’s emission intensity was higher than FY19 and FY20 due to the use of Bream Bay. Overall generation was lower this year which also contributed to a higher emission intensity.