And what are its implications for the reputations of organisations involved in climate action?
New research has revealed what New Zealanders believe to be fair when it comes to property being built on, bought, or sold in areas that are known to be adversely impacted by climate change.
The research, commissioned by Anthem and undertaken by Talbot Mills, is part of a series, “Fair Enough?”, which examines topical issues and reputation through a fairness lens.
Read more: Climate change can result in devastating property issues
The survey of more than 1,000 Kiwis found that 64% of the respondents feel it is unfair to continue to build and develop residential and commercial properties in flood-prone areas – this as sea levels rise twice as fast as previous forecasts.
Findings showed that Kiwis were divided on the commercial implications for insurers and banks servicing customers with property in flood-prone areas. Some 54% of Kiwis believe it is fair that insurance premiums for properties in flood-prone areas are increasing faster than for other homeowners, with men (60%) more likely than women (49%) to consider this fair, and homeowners (63%) much more likely to consider this fair than renters (43%). Some 59% of younger people, meanwhile, believe insurance premium hikes in flood-prone areas were unfair.
The respondents were likewise split in terms of the implications for banks, with 52% of Kiwis thinking it is fair for banks to pull back lending for mortgages in high flood-risk locations, with homeowners (63%) more likely to consider this fair than renters (40%).
Read next: Coastal property investors ignore climate change threat
Some 45% of Kiwis feel it’s fair for councils to continue to provide consents for building on land subject to one or more natural hazards under certain conditions, but women (40%) were less likely to say it is fair for the councils to grant such consents than men (50%).
A majority (82%) of Kiwis expect real estate agents to disclose the flood-risk status of a home while the property is on the market, with older Kiwis being particularly keen on this (85% of 45-59-year-olds and 94% of 60-plus-year-olds).
With wild weather events a concern for New Zealanders, Carolyn Kerr, Anthem co-founder and managing director, said organisations need to be clear about their stance on the issue as this will affect their reputation.
“Fairness has become the currency by which reputations won or lost, and with an issue like this involving various industry sectors, government, and community stakeholders, how you communicate your position and responsibilities greatly impacts public perception of your organisation,” Kerr said.
Commenting on the study, industry leaders from across the banking, insurance, building, and engineering sectors agreed that access to good data, cross-sectoral collaboration, and consumer-friendly information will help organisations assist their customers and stakeholders in making good decisions about building, buying, or selling properties.
“Every organisation’s reputation is at risk here,” said Tim Grafton, chief executive of the Insurance Council of New Zealand. “For the long-term sustainability of a business, you need to embed the risks of climate change into your strategy and business plan.”
“Our understanding of the impacts of climate change and the scale of adaptation required for all infrastructure is growing,” said Amelia Linzey, Becca’s group director for advisory and chief planner. “We as professionals in delivery of infrastructure, now need to stand up and work with communities to help find solutions to enable us to adapt and be resilient, driving future-focused solutions with integrity.”
“For the first time, we are all realizing that this is our generational challenge and everyone coming together collaboratively is one of the ways we can help solve it,” said Blair Turnbull, chief executive of Tower Insurance. “Being transparent with customers will be crucial to building and maintaining trust as we navigate the uncertainty or climate change together.”
“We need to be open and clear with people about what the story is in their area,” said Roger Beaumont, chief executive of New Zealand Bankers’ Association. “It’s crucial to discuss their individual risk in consideration of the challenges we are facing as a country.”
Steve Evans, chief executive of Fletcher Building’s residential and development division, said front-footing actions that organisations are taking to adapt to climate risk is vital.
“Beyond the social license and reputation risk of not taking action, the risk of inaction also needs to be considered,” Evans said. “If people don’t understand why you’re doing certain things, they’re not going to support you, and while [the] public needs to make sure they are keeping themselves informed, it’s also on industry leaders to share data in a way every Kiwi can understand.”
“It’s clear Kiwis are concerned about the adverse effects of climate change,” said David Talbot, Talbot Mills Research managing director. “To ensure trust in companies addressing the issue, the complexities of the issue mean collaboration and communication are key for organisations to maintain and enhance their reputations as they develop climate adaptation plans.”
