housing new zealand environment strategy · horizontal axis indicates housing new zealand’s...

Housing New Zealand ENVIRONMENT STRATEGY 2019

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HOUSING NEW ZEALAND

Environment Strategy

Summary March 2019


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Contents

Introduction 3

What our Strategy will achieve 4

How we will achieve the Strategy 5

How we can reduce our impact 6

What we will do next 8


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Introduction

Purpose

The purpose of the Environment Strategy is to set a clear environmental direction for Housing New Zealand

to address our impacts and areas of influence.

This Strategy outlines:

▪ Housing New Zealand’s key environmental impacts

▪ opportunities for Housing New Zealand to reduce its impacts

Strategic context

New Zealand faces a number of environmental challenges. These include climate change, waste, clean

water, air pollution and native species protection. This strategy is primarily focussed on climate change and

waste as these are particularly relevant to our operations.

The New Zealand Government has responded to an increasing level of awareness of these environmental

issues by making a number of environmental commitments.

▪ international commitments include the Paris Accord, the United Nationals Framework Convention on

Climate Change and the Sustainable Development Goals.

▪ legislation putting these commitments to effect include the Climate Change Response Act (2002) and the

Waste Minimisation Act (2008).

▪ the Zero Carbon Bill (currently in consultation) will set carbon reduction goals and put the frameworks in

place for New Zealand to transition to a low carbon economy.

Housing New Zealand has a role to play

Housing New Zealand own or manage 64,000 homes, giving 185,000 New Zealanders (4.1% of the

population) a place to call home. We are also at the beginning of a large development programme that aims

to deliver 22,000 rebuilt or retrofitted homes and up to 12,800 affordable or market homes in the next ten

years. As such we are a large consumer of raw materials and have a significant environmental footprint.

As an organisation we are uniquely placed to contribute towards environmental objectives. This is due to our

ability to reduce our own impacts, influence the behaviour of our contractors and our customers and to lock

in the future environmental performance of our assets.

A number of initiatives have been shortlisted to achieve this. These are expected to enable us to reduce our

environmental impacts while supporting delivery of our build programme and contributing to improved

customer wellbeing. These initiatives require further investigation and prioritisation as part of the

implementation of this Strategy.

Current practises

Housing New Zealand currently has a number of business practises that we expect deliver environmental

benefit. However, as we do not monitor or report on our performance against any environmental goals, the

benefits and consistency of these activities are currently unquantified. These include practises such as:

▪ intensification of housing density (three to one uplift or higher in appropriate locations)

▪ construction & demolition waste reduction, reuse and recycling

▪ going forward our building standards and designs will include application of HomeStar6

▪ historical retrofit programmes to improve thermal performance of existing stock

▪ over the next four years we will work to meet Healthy Homes Standards for all our properties further

improving energy efficiency.


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What our Strategy will achieve

Vision

The Environment Strategy aims to reduce the impact of our operations, our build programme and our assets

on the natural environment. Delivering the Environment Strategy will mean:

This vision will be achieved by delivering on a number of initiatives to reduce or mitigate our environmental

impacts. A shortlist of potential initiatives is included in this strategy (summarised on page 8). These will be

further investigated and prioritised as part of the strategy’s implementation process.

How the Environment Strategy fits

OUR STRATEGIC PLAN

Housing New Zealand is a strategy led organisation. At the centre of this is our Strategic Plan which outlines

our role as an organisation, our short to medium term priorities and our key initiatives. Our strategic plan is

constantly evolving to respond to opportunities, risks and policy priorities as they arise.

The Environment Strategy contributes towards our Strategic Plan. Outcomes and initiatives identified in this

Strategy will be balanced against other strategic goals to ensure the long term success of our organisation.

FINANCING OUR OPERATIONS

Housing New Zealand is an active borrower in debt capital markets, raising around $1 billion of term debt per

year to help finance our build programme.

HNZ has recently developed a Sustainability Financing Framework1 for the purpose of linking future debt

raising to initiatives that deliver positive environmental and/or social outcomes. These debt issuances

provide an additional layer of accountability, with HNZ required to regularly report on the use of proceeds

and impact.

ORGANISATIONAL TARGET SETTING

The primary purpose of this Strategy was to understand our environmental impact and identify opportunities

to improve. We are currently in the process of further analysing these opportunities. This involves prioritising

initiatives, developing our understanding of the potential benefits, practical considerations, measures,

baseline performance and timelines to implementation for each.

1 https://www.hnzc.co.nz/about-us/investor-relations

Our operations are

environmentally sustainable.

We own and deliver

sustainable, resilient assets.

Our customers are empowered

to live in an environmentally sustainable way.


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How we will achieve the Strategy

Understanding key drivers of our environmental impacts

We have conducted analysis to understand the relative size of our environmental impact. On a national scale

we are a relatively small producer of emissions (0.65% of NZ net annual emissions) and a slightly larger

producer of construction waste (1.3%)2. Presented below is an estimate of the key components of these

impacts for respective size purposes.

Relative size of Housing New Zealand environmental impacts by source

Environmental impacts arising from how we run our business mostly relate to the production of greenhouse

gas emissions (“emissions”). Primary contributors to this are our vehicle fleet (around 5 thousand tonnes per

year (kT/y)), air travel (around 4kT/y) and office electricity use (around 1kT/y). This is approx equivalent to

the emissions produced by 2,100 passenger cars being driven for a year.

How and what we build contributes around 42kT/y of emissions and generates around 30kT/y of waste.

Emissions are primarily generated during the manufacture, transport or disposal of building materials.

How and where we build also creates ongoing environmental impacts and costs which arise from how our

customers use our assets. These include around 275kT/y of emissions produced by our customer’s car

use, 27kT/y produced by household electricity use and 17kT/y by breakdown of household waste. Our

customers are also estimated to produce around 51kT of household waste each year.

Outcomes

To reduce these impacts the Environment Strategy recommends Housing New Zealand strives to achieve

three outcomes:

2 HNZ Environment Strategy 2019

Organisational - How we operate

Lifecycle - How our

customers use our assets

Embodied - How and what we

build

Reduce the emissions produced by our homes, our

construction programme and our

operations.

Reduce the waste produced by our

construction programme, our

operations and our customers.

Improve the native biodiversity, green

spaces and air quality in our communities.


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How we can reduce our impact

Our relative ability to mitigate impacts

The chart below illustrates the relative size of our impacts against our ability to influence change. Based on

this we have identified a number of opportunities to reduce these impacts.

▪ The circle size indicates relative size of each impact

▪ The horizontal axis indicates Housing New Zealand’s relative control over each impact

▪ The vertical axis indicates the expected relative cost of mitigating the impact.

Note further research and case studies are required to validate these findings.

Key opportunities identified

CUSTOMER TRAVEL

Customers’ traveling to and from their homes is the single largest environmental impact that we have

influence over. However, our ability to influence this in the short term is relatively low.

We have an opportunity to reduce transport emissions produced by our current and future customers by

designing and building communities that promote walking, cycling, electric vehicles and the use of other

transport alternatives.

HOUSEHOLD ENERGY USE

Household energy use contributes a relatively small amount of environmental impact compared to transport.

This is due to the high proportion of electricity produced from renewable sources in NZ. However, any

additional homes will require additional energy use. There is a risk that this marginal electricity use cannot be

managed by our renewable electricity resources and that non-renewable sources are required make up the

difference. There is also a risk that to meet the electricity needs of our new homes and uptake of other new

technology (like electric vehicles) new large scale renewable energy projects or transmission line upgrades

will be required. These may result in significant release of emissions (and other impacts) during construction.

Our construction pipeline includes a large number of medium to high density residential developments. This

gives us an opportunity to create ‘self sustaining communities’ where electricity is generated and consumed

locally. These communities rely on ‘micro grid’ technology which stores and distributes electricity in the

community. Our larger complexes and master-planning activities present an opportunity to be world leading

in this area.

Customer car travel

Embodied emissions

Construction waste

Household waste

Biodiversity & air quality

Household energy use

Fleet operations

Air travel

Office operations

Co

st

Influence

Asset use Construction Corporate/ operations

Low High

Hig

h

Lo

w


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Key opportunities identified (Cont.)

CONSTRUCTION EMISSIONS AND WASTE

Emissions are produced via our construction programme by the manufacture, transport and assembly of

materials and disposal of waste. As the ultimate purchaser of construction materials and services we have a

relatively large degree of control over these impacts.

Waste reduction could be achieved by procuring waste diversion or deconstruction services, designing waste

out of our developments and increased use of offsite manufacturing.

Emissions reductions could be achieved by reducing waste (above) and also by use of Environmental

Product Declarations in procurement of materials, Lifecycle Carbon Assessments in designing homes and

ultimately an emissions metric for comparing and capping emissions in our construction programme.

FLEET AND OFFICE OPERATIONS AND AIR TRAVEL

Our fleet and office operations contribute a relatively small amount of Housing New Zealand’s total

emissions and waste. However, these impacts are directly controlled by our organisation.

In particular we have an opportunity to reduce our fleet emissions by procuring hybrid and electric vehicles

as replacement for end of life vehicles. This will contribute to the New Zealand Government’s target of

64,000 electric vehicles by 2021.

BIODIVERSITY AND AIR QUALITY

In some suburbs we own up to 70% of the housing stock. As such we have an opportunity to influence the

air quality and biodiversity in these areas.

This would mean our low density homes have appropriate local vegetation planted in them and our high

density developments leave an appropriate amount of permeable and appropriately planted surface area.

This will reduce the heat impacts of concrete and buildings on local air temperature and ensure local

biodiversity is not reduced or lost. Broader sustainability benefits

Our Environment Strategy has not considered the value of co-benefits which may arise from the

implementation of the proposed initiatives. Nor does this Strategy consider our position on sustainability as a

whole. However we will consider co-benefits that initiatives could be expected to deliver as part of the

business cases for these initiatives going forward.

We do have a number of other programmes which contribute to sustainability. These include but are not

limited to: our Customer Strategy, our Long Term Financial Plan and the Innovate Partner Build programme.

Generally we would expect that initiatives proposed in the Environment Strategy deliver co-benefits in the

form of increased customer wellbeing and reduced risk of climate change related financial shocks.

Environmental sustainability

Social sustainability

Financial sustainability


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What we will do next

Initiatives

Achieving the outcomes will require changes to the way we operate. A number of initiatives have been

identified to do this. These are based on ideas trialled or implemented elsewhere within New Zealand or

internationally and include:

▪ transitioning our car fleet to electric vehicles

▪ increasing use of video communications technology as a substitute for air travel

▪ selecting construction materials and methods which release reduced amounts of carbon during

construction compared to standard industry practises

▪ optimising our standard designs to ‘design out waste’

▪ including waste diversion or deconstruction in our procurement criteria for construction services

▪ building and maintaining assets that produce reduced lifecycle emissions and waste (both while in use by

our customers and resulting from asset management activities)

▪ optimising land use to promote walking, cycling use of public transport or mobility as a service

▪ engaging with partners to provide alternative transport services to our customers

▪ installing solar electricity generation at our homes

▪ staff and tenant engagement and education.

Decision making principles

The next steps for this strategy will involve more detailed analysis of a number of prioritised initiatives.

Initiatives have been prioritised based on the decision making criteria below:

The next steps to achieve the objectives and vision for the Environment Strategy will include:

▪ assess and prioritise initiatives based on their expected impact, cost and effectiveness

▪ develop implementation plans for prioritised initiatives

▪ investigate, pilot and implement initiatives.

Initiatives

HNZ influence/

control

Cost Co-benefits

Government alignment

Environmental impact

Can we control the

outcome?

How much difference will

this make?

Will it be cost

effective?

Does this benefit our

customers?

Does this align with

Govt.

objectives?


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