Environment

The efficient use of natural resources is one of the biggest challenges facing our generation; a challenge which Fletcher Building takes very seriously.

We are committed to ensuring that the use of natural resources, including the emission of CO₂ from our operations, products and services are reduced.

New Zealand's emissions trading scheme (ETS) extended coverage to industrial and transport emissions on 1 July 2010. The ETS has been designed so that energy suppliers rather than energy users have to buy emissions units (or carbon credits) and surrender these to the Government. Our operations that emit CO₂ from fossil fuel combustion do not directly participate in the ETS. Instead, they are subject to higher energy costs, as these are passed down by energy suppliers.

Our cement and steel manufacturing operations, however, emit process CO₂, and our cement plant uses imported coal. This means that these operations are direct participants in the ETS. Cement and steel manufacturing also meet the threshold texts for offsetting the costs of the ETS on emissions-intensive, trade-exposed industries. Both will receive a free allocation of emission units to partly offset their increased costs.

The ETS will impose additional costs on our New Zealand operations, but with the free allocation available to cement and steel these costs will not be material. Our efforts to continually reduce emissions and improve energy efficiency will ensure that these costs are further reduced.

Climate change and environmental sustainability

Fletcher Building has an executive Climate Change and Environmental Sustainability Council which is chaired by the chief executive. Established in 2008, it directs company-wide programmes of work in carbon accounting and emissions trading, internal efficiency programmes, employee engagement, and external communications.

Much of the Council's efforts in the last year have been directed at emissions trading and carbon reporting, with the introduction of the ETS in New Zealand, and the energy and carbon reporting requirements in Australia. There has been a focus on identifying energy efficiency opportunities, to enable us to achieve our commitment to reducing our CO₂ emissions by 5 percent between 2008 and 2012. Internally, we are developing tools to assist waste reporting and reduction initiatives.

Our energy and CO₂ inventory is updated every six months, and provisional figures for this financial year shows total CO₂ emissions of 1,218,793 tonnes. This includes the CO₂ emitted during the generation of electricity used by Fletcher Building. New Zealand's emissions totalled 708,319 tonnes, while Australia emitted 351,329 tonnes. Of those business units with a high CO₂ output, the largest single emitter was the Golden Bay Cement plant with 528,440 tonnes. The major manufacturing plants for laminates and panels emitted a total of 363,619 tonnes and the Pacific Steel and Wire plants emitted 64,524 tonnes.

Back to top Emissions reduction

By 31 December 2009, two years into our five year CO₂ emissions reduction programme, our emissions were analysed to assess our progress. Absolute emissions had decreased from 1,526,854 tonnes for 2007 to 1,248,475 tonnes CO₂, a decline of 18 percent. Production levels in 2009 were less than 2007, and when emissions were normalised for revenue and production levels, it was concluded that there has been very little change in emissions intensity.

The manufacture of cement in 2007 resulted in the emission of 0.795 tonnes of CO₂ per tonne in 2007 and 0.794 tonnes of CO₂ per tonne in 2009. In 2009 CO₂ emissions intensity improved slightly through the increase in biomass fuel substitution from 11 percent (2007) to 20 percent of thermal energy. However, this was offset by reduced energy efficiency resulting from reduced production and consequent difficulty in optimising the thermal efficiency of the kiln.

Of the group's other emissions-intensive products, fibre-glass insulation recorded a significant improvement in emissions efficiency. This results from the significant reduction in the Auckland plant, where the conversion from a gas-fired furnace to an electric fired furnace reduced emissions intensity per tonne by 50 percent. The electric furnace is more energy-efficient and also benefits from the use of New Zealand's electricity with its comparatively low emissions factor.

In order to achieve our target over the next three years, we will require further projects in our energy-intensive plants and a focus on energy efficiency in our other operations.

Fletcher Building participated in the Carbon Disclosure Project for the fifth time this year. This required a complete inventory of all our 2009 CO₂ emissions and a report describing how the company manages the risks and opportunities from future climate change. All NZX50 and ASX100 companies are asked to participate.

Back to top Other achievements 

We currently participate in a number of organisations that are leading sustainability practices and policies. In New Zealand, this includes an industry joint venture to develop a single residential rating tool. We have also contributed to a number of important Green Star-rated buildings across Australia and New Zealand, either through being a construction contractor or a supplier of accredited materials.

We have recently completed a resource recovery facility in Kumeu, north of Auckland, which sorts and, where possible, recycles construction and demolition waste. The facility utilises the buildings and some of the process equipment of our recently-closed particleboard plant, an efficient use of a substantial existing investment in an emerging area of business opportunity.