ESG Focus: Decarbonisation, Renewables & Cyber Crime

This story features WHITEHAVEN COAL LIMITED, and other companies. For more info SHARE ANALYSIS: WHC

FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future: 
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/

ESG Observations From The February Reporting Season In Australia

Decarbonisation, renewables and cyber crime proved the big ticket ESG items during the February reporting season as corporations rushed to get their reporting act into gear ahead of the introduction of mandatory disclosure rules this year.

-Decarbonisation and renewables investment strong
-Companies prepare for incoming mandatory climate reporting
-Cyber crime a big-ticket item and AI gaining traction
-Plenty of green capital expenditure
-More targets and commitments set
-Banks starting to get serious
-REITs pushing ahead
-Waste management, circularity and biodiversity largely sidelined

By Sarah Mills

Decarbonisation progressed strongly among the ASX200 in the December half as companies rushed to cut emissions. 

In fact, straitened times in 2023 meant decarbonisation investment dominated big-ticket spending at the expense of nearly everything else save out-of-hand cyber crime, companies grasping for cheap, low-cost reporting efforts on biodiversity, physical safety, and indigenous Reconciliation Action Plans: and there was plenty of talk about AI.

Apart from affordability much of the reporting focus also reflected on preparations for the introduction of a slew of disclosure standards this year as mandatory climate reporting looms, particularly the Australian Sustainability Reporting Standards.

On the decarbonisation front, there were plenty of announcements. Scope 1 and Scope 2 emissions reductions dominated with only a few companies attempting the Scope 3 challenge (supply chain emissions).

When it came to decarbonisation choices, renewables and EV fleets proved the flavour of the day, but some companies favoured bio fuels or hydrogen options, some reached for carbon offsets with others doggedly pursuing carbon-capture options.

Indeed, despite a series of scandals and falling prices in the carbon offset market, laggards continued to reach for offsets in 2023, demand hitting a record high (up 6%) in 2023, with December retirements (a key indicator of demand) about 43% higher than the next closest month, according to BloombergNEF. 

This is the first in a series of two articles and focuses on the big-ticket investments of decarbonisation and cybersecurity, while rounding up the handful of moves in AI, circularity and biodiversity. We allocate REITs their own section for easy comparison.

The second article covers the social themes of physical and psychosocial safety, industrial and indigenous relations, and modern slavery, plus governance. 

As a reminder, investors prefer shorter term targets to long-dated targets (preferably a combination of the two) and regular reporting to allow them to better monitor progress.

The bulk of the research underlying this article is sourced from Macquarie and Jarden.

Decarbonisation – The Naughty And Nice

We lead this section with emissions reductions and green capital expenditure before grouping the source of these cuts under renewable energy, biofuels, EVs, carbon offsets and carbon capture. 

As with last year, it is easier to start with the emissions reduction laggards given they represent the minority.

Whitehaven Coal ((WHC)) reported a whopping 25% increase in emissions but Macquarie expects the Daunia/Blackwater acquisition should shift this dial in 2024.

BHP Group ((BHP)) was a surprise laggard, managing to increase emissions 4% in the December half.

Aurizon Holdings’ ((AZJ)) thermal coal revenue rose to 29% of revenue in the December half, up from 27% in FY23 – good for short-term investors but not so good for those with an eye on the longer term.

Woodside Energy’s total emissions from operated projects in 2023 jumped 17% over 2022, and are up 78% from 2021 levels, observes the Conservation Council of WA. The company’s Scope 3 emissions rose 20%, almost doubling since 2021.

Mineral Resources ((MIN)) increased carbon intensity. 

And The Winners Are …

Macquarie hands the crown to Cleanaway Waste Management ((CWY)), which managed to cut greenhouse gas emission from its landfill -15% beyond its FY24 target.

Telstra ((TLS)) announced it is now running on 100% renewable energy (in line with its 2025 target) through contracted energy projects. 

Wesfarmers ((WES)) cut Scope 1 emissions at WesCEF and invested in abatement initiatives and continued to explore carbon capture solutions. 

Smartgroup Corp’s ((SIQ)) emissions fell -35% in 2023 from 2022, the company advising 63% of all electricity used by offices was renewable and that the company expected to hit 100% by 2026.

GPT Group ((GPT)) achieved carbon neutrality for Scope 1, 2, and 3 emissions ahead of FY24 target and expects independent certification to be finalised by December.

G8 Education ((GEM)) cut Scope 1 and Scope 2 emissions by -10%.

List of emissions reductions

Plenty of other companies logged reasonable emissions performances.

Analysts observed companies on track with 2025 emissions or renewables targets included: Ampol ((ALD)), Atlas Arteria ((ALX)), Bendigo & Adelaide Bank ((BEN)), Charter Hall Group ((CHC)), Cleanaway Waste Management, Goodman Group ((GMG)), Growthpoint Properties ((GOZ)), Healthco Healthcare and Wellness REIT ((HCW)), HMC Capital ((HMC)), Homeco Daily Needs REIT ((HDN)), Lend Lease ((LLC)), Region Group ((RGN)), and Woodside Energy ((WDS)).

Those on track with 2030 targets included The a2 Milk Company ((A2M)), Ansell ((ANN)), Brambles ((BXB)), Scentre Group ((SCG)), Telstra and Woodside.

Wesfarmers cut Scope 1 and market-based emissions -8% and its Mt Holland lithium mine has entered the ramp up phase.

Santos managed to ease its Scope 1 and Scope 2 emissions but Scope 3 emissions spiked 9%. The company’s methane emissions fell -6%.

Adbri ((ABC)) launched lower carbon cement and concrete brands EvoCem and Futurecrete and analysts observed it was tracking ahead on FY24 emissions cuts. 

Transurban ((TCL)) advised it had achieved 100% renewable electricity for its North American operations.

Worley’s ((WOR)) Scope 1 and Scope 2 emissions fell -7%. 

Woolworths Group ((WOW)) has renewable electricity across 23% of its operations and cut both Scope 1 and Scope 2 emission from a 2015 base line.

Companies Set Targets And Commitments

Analysts advised that progress on decarbonisation, renewable energy and scope 3 emissions proved standouts during the reporting season with more than 70 companies providing climate-related updates.

New rounds of commitments featured, some companies upping the ante and others just setting the groundwork.

Jarden observes Qantas Airways ((QAN)) announced a 10% Sustainable Aviation Fuel target for 2030.

Macquarie observes QBE Insurance Group ((QBE)) set an internal carbon price of US$65/t laying the foundation for internal investment in emission reduction projects. (The insurer announced 100% renewable electricity use for the third year).

QBE’s Scope 1 and 2 emissions reductions were well in advance of its target and the insurer continues to decarbonise its fleet, observes the analyst.

Scope 3 emissions also drew QBE’s focus as it negotiated with its supply chain and it's expects to set a target by the end of 2025.

Woodside announced a Scope 3 target, which complements its US$5bn new energy investment target, say analysts.

Genesis Energy ((GNE)), National Storage REIT ((NSR)) and Ventia Services Group ((VNT)) set emissions targets, the latter two for 2030, and Genesis for 2040.

TPG Telecom ((TPG)) achieved SBTi validation for long-term, short-term and net zero targets.

Iress ((IRE)) significantly raised its 2030 Scope 1 and Scope 2 emissions reduction target

Aurizon announced plans to decarbonise its fleet either through battery electric locomotives, battery electric tender or hydrogen electric tender.

Origin Energy ((ORG)) expects to meet a virtual power plant (VPP) target of 2GW by FY26. A relatively new kid on the block, VPPs are better known as battery aggregation, which connect batteries in an energy sharing network, usually with residential solar panel and battery systems.

Seek ((SEK)) achieved Climate Active carbo-neutral certification and is finalising a renewable energy agreement to hit 100% renewable energy by 2025.

The company committed to 40% renewables use for operations by 2024.

Pilbara Minerals ((PLS)) aims to cut power related emissions intensity by -80% by 2030, although absolutes are expected to rise with expanding operations, say analysts. The company also advised it was moving from diesel to natural gas.

Many companies were also preparing for upcoming mandatory climate reporting, Magellan Financial Group ((MFG)), for example, readying for its first climate report disclosures aligned to TCFD.

In particular, many were readying themselves for the introduction of Australian Sustainability Reporting Standards (ASRS), which are expected to be handed down in the June quarter.

The standards will be phased in across three groups over four years based on entity size and profile.

Macquarie believes the companies that are captured by the initial rules (68% of its coverage) are fairly well positioned to meet these standards, perhaps with the exception of Scope 3 (supply chain) emissions.

The analyst expects the advent of the ASRS will result in a greater integration of ESG with company financial statements.

Macquarie observes those developing roadmaps and gap assessments as a priority ahead of the introduction of mandatory climate reporting included Domain Holdings Australia ((DHG)), G.U.D. Holdings ((GUD)), Maas Group ((MGH)), Pepper Money ((PPM)), Qualitas ((QAL)), Qantas Airways, QBE Insurance, REA Group ((REA)), Region Group, Seek, Transurban, TPG Telecom and Whitehaven Coal.

Rounding Up Green Capex 

Green capital expenditure continued to feature in the December half.

Macquarie observes roughly 22% of ASX200 companies announced decarbonisation spending in the February reporting season and the analyst expects growing scrutiny to emerge on project returns.

Origin Energy reported it was targeting renewable and storage capacity in its generation portfolio at 4GW by 2030. 

Macquarie observes the company is adopting a capital light approach to wind and solar, developing but not holding assets, saving its balance sheet for battery investments. 

Its 260MW Stage 1 ($600m) battery at Eraring is under construction and its 240MW Stage 2 project remains in the feasibility stage. 

Origin plans to spend -$400m at Mortlake’s 300MW battery following a final investment decision and feasibility studies are underway for Darling Downs and Templers West, observes the analyst.

The company has also established joint ventures for Hunter Valley offshore wind tenders, a controversial move given expected electorate backlash.

G.U.D. Holdings is slowly lifting its renewables use, installing a 200kw solar system and started sourcing GreenPower electricity for its Australian distribution businesses.

Seven Group ((SVW)) expects 20% of Coates branches will be subject to a solar rollout by June 30.

On the future-facing commodities front, South32’s ((S32)) final investment decision on the Hermosa Taylor zinc deposit was agreed, generating a capital expenditure bill of -US$2.2bn. 

First production is expected in 2027 and initial operating life is estimated to be 28 years.

The company also announced plans to cut emissions by 2035 and convert Worsley Alumina’s fire coal-fired boiler to natural gas, with a second due in the June half.

Santos plans to spend -US$500m on energy efficiency projects over the decade, as well as -US$3bn to -US$4bn for other decarb low carbon fuel hubs and nature based offset projects.

The company has a demonstration scale e-methane project at Moomba on the go and the Bayu Undan carbon capture and storage project FEED is 86% complete.

Woodside has invested -US$355m out of its US$5bn budget for new energies, estimates Macquarie. 

The company reiterated its expectation of achieving a new energy internal rate of return of more than 10% and payback within 10 years.

Fortescue ((FMG)) installed 320km of transmission lines for the Pilbara energy connect program and is targeting more than 500km of transmission lines.

Only three out of the company’s promised five final investment decisions were forthcoming in the half: Fortescue’s Phoenix Hydrogen Hub at a cost of -US$550m; its Gladstone PEM50 Project; and its Green Iron Trial Commercial Plant in the Pilbara.

The company’s estimated capital expenditure bill for FY24 comprised: between -US$300m and -US$500m on decarbonization; and another -US$500m for Fortescue Energy. Of that, -US$104m was spent on decarbonization in the first half and -US$165m on Fortescue Energy.

Rio Tinto’s decarbonisation capex for FY24 is estimated at -US$750m, up from -US$425m in FY23. Analysts observe the company has to average roughly -US$1bn capex a year to reach its 2030 target, excluding Safeguard Mechanism costs.

AGL Energy ((AGL)) is rolling out 800MW’s worth of grid batteries, at: Liddell (500MW at a cost of -$750m with construction to be finalised in 2026); Broken Hill (50MW in the testing phase); and Torrens Island (250MW and already operational). 

Macquarie observes the company plans to spend between -$3bn and -$4bn by FY30 and another -$5bn to -$6bn by FY36.

AGL expects to deliver post-tax returns of 6% to 8.5% on renewables and 7% to 11% on firming and flexible generation.

Downer EDI ((DOW)) advised it was planning renewable investment to cut scope 2 emissions, cutting 490t by investment in solar PV at asphalt plants, and cutting 3850t through renewable energy purchases.

Viva Energy ((VEA)) advised its ultra-low sulphur gasoline project was being constructed at an estimated cost of -$200m with completion expected in June 30, 2026. 

Regis Resources ((RRL)) commissioned a 9mw solar farm to supplement its diesel power at Garden Well Power Station and a 62MW integrated wind, solar and battery facility at its Tropicana mine is pegged for completion in the first half of 2025.

Sandfire Resources ((SFR)) commissioned the construction of a dedicated solar facility at Matsa to supply 25% of the mine’s electricity progressively from 2025 and is examining options at Motheo.

The assessment phase at Beach Energy's ((BPT)) Otway Basin has been finalised and the project is awaiting commercial assessment.

The company has prioritised three projects for the second half of 2024: a flare reduction/permeate recovery project in Beharra Springs; a wind power generation study at Taranaki Basin; and gas plant electrification at Lang Lang.

G8 Education rolled out more than 95-kW of solar energy, which the company estimated saved it $330,000 in energy costs a year.

Orora oxyfuel technology investments to cost -$90m over FY23 to completion in FY25.

Woolworths declared sustainability capex of -$49m.

Elsewhere, Ampol, APA Group ((APA)) and Tabcorp ((TAH)) all announced decarbonisation spending this season.

Other Decarbonisation Observations

Given a slower-than-forecast ramp-up in renewables, Macquarie doubts Origin Energy will close Eraring in August 2025, believing it will leave the NSW energy market too tight.

Rio Tinto signed Australia’s largest renewable PPA to supply its Gladstone aluminium operations from Windlab’s 1.4GW Bungaban wind energy project.

Adbri and Boral ((BLD)) pointed to growing momentum in demand for low carbon materials. 

Both companies, along with BlueScope Steel ((BSL)) advised they were examining alternative fuels and electrification.

ASX ((ASX)) is still working on its proposed carbon exchange.

Hydrogen And Other Alternative Fuels 

Having garnered $115m in grants, Origin Energy expects to be delivering green hydrogen from the mid 2020s. 

Ampol announced it was laying the groundwork for customer trials of Australian hydrogen refuelling units after reaching an agreement with One H2. 

Viva Energy reported it had supplied the Australian Defence Force with sustainable aviation fuel, and had signed a deal with Cleanaway to provide renewable diesel.

Viva Energy also has plans to repurpose its Geelong refinery to process biogenic and waste feedstocks and signed a 10-year power purchase agreement with Acciona Energia.

Bankers Getting Into Gear

Banks are starting reporting on fossil fuel exposures and are more consistently entering the sights of analysts. 

At this rate, banks should be seriously getting their ESG act into gear by 2025.

Macquarie observes Commonwealth Bank’s ((CBA)) loans to coal miners were steady at $1bn, while lending to oil and gas fell to $2bn from $2.6bn.

CBA’s investment in sustainable finance was $5.9bn in the December half observes Macquarie and the bank is targeting $70bn by FY30, suggesting a strong ramp-up from here.

The bank’s renewable energy exposure sat at a fairly small $6.1bn, up 30% from June 30.

Infrastructure and mining services

It was raining green Aussie dollars (and some greenbacks) for the Australian infrastructure and mining services sector.

Maas Group advised renewable energy projects were the major contributor to its 29% improvement in earnings (EBITDA) for the December half and that its renewables pipeline for the next three to five years was strong.

Worley logged sustainability related work of $2.86bn in the December half – equating to 51% of aggregated revenue. The contractor advised sustainability constituted 83% of its factored sales pipeline, up from 77% in FY23. Worley retains its target of gaining 75% of its revenue from sustainability business by FY26.

The company advised it is now separating renewables, critical minerals, remediation, restoration and direct air capture out from green transitional business such as natural gas, decarbonization of traditional markets and carbon capture utilisation and storage.

APA Group cited plenty of renewables, transmission and gas opportunities advising it has $1.8bn of sustainable work in the pipeline excluding the Pilbara over FY24-FY26.

Ventia Services ((VNT)) and Genus Plus ((GNP)) also reported strong pipelines.

Carbon Offsets And Safeguard Mechanism

Resources companies reached for carbon offsets to manage voluntary and compliance-based offset costs such as the Australian Safeguard Mechanism’s ACCUs.

Rio Tinto estimated a -US$1bn impact out to 2030 for capitalised voluntary and compliance-based offset costs.

Carbon-offset projects/solutions were mentioned by Cooper Energy ((COE)), Karoon Energy ((KAR)), Santos, Viva Energy and Woodside.

Viva Energy advised the Safeguard Mechanism was likely to result in greater net emissions reduction than its -20% voluntary commitment.

QBE Insurance purchased carbon credits to maintain carbon neutrality. These were related to renewable energy and fire abatement projects.

Whitehaven Coal reiterated its Safeguard mechanism cost of $1/t for the December half. The company will have to purchase approved carbon offsets before March 31, 2025 to meet the FY24 emission intensity compliances. 

The coal miner says its reporting is in line with the incoming Australian Sustainability Reporting Standards

REITs

Among the REITs, the highlights included:

Arena REIT ((ARF)) installed solar systems on 88% of its portfolio and received a 6-star NABERS, up from 5.5. It also achieved a 100% sustainability linked loan margin discount for meeting its FY23 sustainability performance targets.

All up, Arena cut Scope 1 and Scope 2 emissions by -13% and maintained its Climate Active carbon-neutral certification.

Charter Hall ((CHC)) topped the 2023 GRESB (Global Real Estate Sustainability Benchmark) Report for Australia and NZ listed retail entities. Its NABERs rating was steady at 5. 

Goodman Group also earned a star, its global solar installations landing at 312MW placing it on track to meet it 2025 target of 400MW.

The company also continued to decarbonise its data centres as planned.

The rest of the field were relatively lacklustre. HomeCo Dail Needs REIT ((HDN)) is largely on track to meet targets, as were HealthCo Healthcare & Wellness REIT and Vicinity Centres ((VCX)).

Most REIT’s emissions reduction focused on renewables and Mirvac Group ((MGR)) and Growthpoint Properties ((GOZ)) mentioned electrification. Mirvac ((MGR)) and Stockland ((SGP)) reported they had procured lower carbon materials.

Carbon Capture

Having established in previous articles the dubious decarbonisation credentials of many carbon capture projects (for example injected carbon capture projects are expensive, uneconomic to date, and can be prone to leaks), we round up progress among the ASX’s carbon wranglers.

Macquarie observes Santos’ and Beach Energy's Moomba injected carbon capture project is now 80% complete and the pair expects first carbon injection in 2024. 

Santos’s Western Australia and Alaska Pikka CCS projects are underway, as are its nature-based projects in Papua New Guinea, Alaska and Australia.

The company says electrification should cut the carbon intensity of its operations, freeing up carbon capture storage capacity to sell to customers for external revenue. 

Woodside appears to continue to seek out carbon capture opportunities despite the failure of its project at Gorgon; in the December half it was reported only one third of the targeted emissions were buried. 

All That Techie Stuff

Despite tightened purse strings, cybersecurity and scams were areas that could not afford to be ignored given the scale of losses being incurred globally.

According to PwC’s 2024 Global Digital Trust Insights Survey cyber costs grew sharply during 2023.

Macquarie observes cyber crime reports rose 23% year on year according to ReportCyber to nearly 94,000.

Jarden expects 2024 will continue to draw cyber investment given rising cyber crime and fraud. 

Commonwealth Bank came out swinging in 2023, advising in the February reporting season it had invested more than -$750m to protect customers from financial crimes such as fraud, scams and hacking. 

Jarden observes that resulted in the prevention and recoup of more than $100m in scams in the December half.

Telstra and Commonwealth Bank launched a scam indicator in partnership called Cleaner Pipes. The project is estimated to have blocked 10m scam calls, 11m scam SMSs and 280m scams and unwanted emails. Yay!

Bendigo & Adelaide Bank advised its customer-related fraud losses fell -$9.5m due to scam and fraud detection investment.

TPG Telecom introduced cross-industry collaboration initiatives to protect customer information, which included partnerships with the Commonwealth Bank and the Australian Financial Crimes Exchange.

Challenger ((CGF)) (which spent -$10m) and Ingham's Group ((ING)) also reported cybersecurity investments while Domain Holdings, Seek and Telstra reported a focus on cyber defence and governance, observes Macquarie.

Many companies announced the rollout of cyber security training through their organisations and others to cybersecurity governance (which we cover in our next article).

Australian Finance Group ((AFG)), G8 Education, Kelsian Group ((KLS)), Nine Entertainment ((NEC)), SG Fleet Group ((SGF)) and The Lottery Corporation ((TLC)) also announced greater cyber spend.

It will be interesting to see what types of innovation will flow from increased investment over the next couple of years.

AI Attracting Greater Investment

As for Artificial Intelligence, Jarden observes 23 companies across several sectors were making all the right noises.

Flight Centre ((FLT)) suggested AI could be used to categorise emails to prioritise urgent requests and increase agent efficiency. 

Telstra advised it was piloting AI applications such as Ask Telstra, and that it had consequently improved 50% of its key process. Telstra expects to hit its target of 100% by FY25.

Jarden says “responsible AI” were the kind of words investors were keen to hear and AMP ((AMP)), Commonwealth Bank and Seek all came in to bat on this front.

AMP reported it was developing a “responsible AI framework”, Commonwealth Bank rolled out a “responsible AI” toolkit, and Seek was developing “responsible AI” principles.

Pro Medicus ((PME)) invested $5m in Euclid, a company specialising in technology for cardiac CT.

Corporate Travel Management ((CTD)) major AI and machine learning project scheduled for FY24/FY25.

Biodiversity

Macquarie observed “nature” was sidelined in the December half by incoming mandatory climate reporting with Ampol, for example, advising it had deprioritised biodiversity for that very reason.

Meanwhile, Jarden observes the finalisation in late 2023 of the Taskforce on Nature-Related Financial Disclosures gave companies a hook upon which to hang their reporting hats, GPT Group announcing its maiden Climate and Nature Disclosure Statement. 

GPT Group brings to five the number of companies to have committed to adopting the Taskforce on Nature-related Financial Disclosures (TNFD), the others being Brambles, Transurban, Telstra and Vulcan Energy ((VUL)).

Other companies to mention nature in their December-half results included Bendigo & Adelaide Bank, Charter Hall, and Qantas, most of which focussed around strategies, and disclosures.

Woodside committed to supporting positive biodiversity outcomes in their areas of operation and developed a Biodiversity Positive Program Framework.

In terms of projects, Iluka Resources ((ILU)) successfully trialled the rehabilitation of a seeding method and conducted its largest vegetation data collection operation at Jacinth-Ambrosia.

Sandfire Resources is working on the rehabilitation of DeGrussa as part of a framework agreement with Yugunga-Nya to protect indigenous heritage.

Circularity And Waste Management

It was fairly quiet on the circularity front, despite the rapidly approaching Australian 2025 National Packaging Targets.

Boral announced it was recycling 2m tonnes of construction material annually. 

Cleanaway opened its Altona facility capable of recycling 1bn PET plastic bottles a year to produce 20Kt of recycled PET resin, to make new PET bottles.

The waste collector also launched its Victorian container deposit scheme in November through TOMRA, establishing 140 collection points across 28 local government areas capturing 2m Victorians.

Cleanaway also posted a reduction in environmental notices to 14 from 17 (in the June half).

JB Hi-Fi ((JBH)) phased out 15c yellow bags and replaced them with paper bags and multi-use non-woven bags. It also installed battery and mobile phone recycling stations across JB Hi-Fi and Good Guys shops.

Woolworths reported it had cut virgin plastic in packaging by -29% from an FY18 baseline.

Ampol reported it is planning recycling initiatives at retail sites to reduce food and packaging waste and plans to design its own-brand packaging to meet National Packaging 2025 targets.

General waste management also gained a flag, Seven announcing waste compaction technology at WesTrac PFCs had cut landfill volumes, improved centre economics and lowered the company’s environmental impact. 

CSL ((CSL)) reported it had cut biohazard disposable waste by -10% to -15% in the December half as it is rolling out its Rika platform.

We are still keeping a keen eye on the Licella technology that Amcor ((AMC)) has hitched its wagon to. The Teeside, England, rollout of the technology (through Mura) has yet to make any shipment of recycled product according to media reports. First product was promised in early 2024, so one would expect to see the proof by June 30.

Licella is a technology that claims to be able to recycle nearly all types of plastic back to oil ready for recycling back into plastic, the quality of which would essentially be that of virgin plastic.

EV Charging and Hydrogen Refuelling

Lots going on with hydrogen refuelling and EV charging initiatives. 

Fuel replacement initiatives were on trend – batteries, hybrids, alternative fuel gas substitution and hydrogen refuelling all gaining a flag.

Kelsian advised it was decarbonising its fleet and had closed the December half with 94 battery electric buses and 4 hydrogen fuel cell buses.  The company is targeting 379 buses by the end of 2025.

SG Fleet Group reported its EV orders increased five-fold on the previous corresponding half.

Kiwis Cracking It

The Kiwis appear to be all over ESG, companies like Contact Energy ((CEN)) ticking boxes all over the place, from environment, to social to governance, and here we highlight some of the environmental moves.

Of particular note, Contact Energy’s emissions intensity from thermal generation fell roughly -30% in the half following the closure of Te Rapa on June 30.

The company also commissioned two geothermal plants during the half adding 1.9TWh.

Auckland International Airport ((AIA)) completed a trial to separate organic waste in domestic and international terminal food courts and spent -NZ$5m on a transitional waste facility.

Air New Zealand ((AIZ)) ordered its first battery powered all electric aircraft to join in 2026.

Fletcher Building ((FBU)) reported it is on track for a -30% reduction in carbon emissions by 2030. With certified sustainable products rising to 74% from 71%.

Meridian Energy’s ((MEZ)) renewable deployment has risen to 4.9GW from 4.7GW in the previous corresponding period.

Meridian also spent -NZ$186m on batteries, the first of which were due to arrive in the March quarter, to be finished in 2024.

FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future: 
https://www.fnarena.com/index.php/financial-news/daily-financial-news/category/esg-focus/

Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.

FNArena is proud about its track record and past achievements: Ten Years On

Click to view our Glossary of Financial Terms