Materiality is an assessment of how the activities of a business impact society, the environment, specific stakeholders and the finances of the business itself. That business may have caused these impacts, contributed to them or have links to the impacts.
Meridian is committed to delivering on our purpose of Clean energy for a fairer and healthier world. Our strategy for achieving this is an all-encompassing focus on climate action. We also recognise that it matters how we manage the impacts associated with our operations, development practices and supply chain.
To do this, Meridian considers both impact materiality (society, environment and stakeholders) and financial impact (how they do or may impact our bottom line). This is known as double materiality.
Closely related material impacts are then grouped into material topics.
Meridian reports on our material impacts and topics as part of our annual Integrated Report. We do this based on the updated 2021 Global Reporting Initiative (GRI) standards. Our material topics are also reflected in our business strategy and risk management approach.
We measure our material impacts using a mix of internal and external stakeholder engagement, together with consideration of:
In 2024 we began alternating between what we call review years and reassessment years.
Review years involve an internal process which considers only those material impacts assessed and reported in the previous year. The focus is on reviewing and rescoring the significance of our existing impacts based on any changes in our operating or sustainability contexts. To do this we conduct a survey for each individual impact. These are completed by a range of internal subject matter, financial and risk experts.
We assess the significance of each impact by scoring its severity and likelihood. For severity, we consider the scale (how grave the impact is), scope (how widespread it is) and each impact’s irremediable character (how hard it is to put the harm right). Potential impacts are considered against the likelihood of the impact occurring. In addition, we consider the potential financial impact on Meridian over time.
Reassessment years involve the same internal process, together with external stakeholder engagement, through a specialist research agency, and consideration of new impacts. The latter involves reviewing risks captured in our risk management system, consultation with internal experts and external stakeholders, and a desktop study which explores changes in the global electricity industry and New Zealand business context. New impacts are then added to existing ones to be assessed, scored and ranked.
Meridian’s material topics are reflected in our risk management approach. We review our enterprise risks every six months, new and emerging risks every quarter and ESG risks (including new ones arising from material impacts assessment) at least annually. A key part of these reviews is to ensure appropriate mitigation measures are in place to deal with those risks.
In assessing risk related to our material topics we consider their potential impact on our business across the following risk categories:
Learn more about our risk management approach.
Below is a sample of our material topics for the year ending 30 June 2024.
For a full list of material topics and impacts, their related targets and progress against targets, refer to our FY24 Integrated Report (pp 74-80).
| Material Topic | Business Case (Why this matters) | Type of Impact | Related Material Impacts |
|---|---|---|---|
| Renewable energy generation | This is a core part of our business and key to our business success. Meridian generates around one-third of all New Zealand’s electricity – all from renewable sources – and electrification is an obvious catalyst for New Zealand to achieve a net-zero economy. To maintain our business strength and drive further decarbonisation, Meridian is also investing heavily in new renewable generation assets. | Revenue | 100% renewable generation Increasing renewable energy |
| Ngā whakaaweawe o Te Ao Tūroa – impacts on the natural world | The construction of our hydro assets, in particular, had a significant environmental and cultural impact. These hydro assets represent 80% of our total electricity generation, which makes them critical for our business. As a result, taking steps to maintain our social licence to operate through enhancing the natural world and working in partnership with iwi is critical to the sustainability of our business. | Risk | Impact on Cultural Wellbeing Impacts on River Systems |
| Customer decarbonisation | Decarbonising customers through electrification is key to growing overall demand for electricity. Thermal-fuelled industrial process heat, for example, accounts for 34% of New Zealand’s total energy consumption. Electrifying this alone represents a significant growth opportunity, and our goal is to grow this to 600GWh from a zero base in FY21. Customer decarbonisation also lies at the heart of our Retail Strategy and is one of three pillars of our Climate Action Plan. It reduces customer emissions, reduces overall energy costs and provides opportunities to increase the flexibility of New Zealand’s electricity system through demand response and utilisation of the energy customers store and generate. This flexibility is a key enabler of the growth of intermittent wind and solar generation, which is key to Meridian’s future business success. |
Revenue | Reducing customer emissions |
As part of our materiality approach, Meridian’s materiality analysis identifies the most significant positive/negative impact on external stakeholders associated with our company’s business operations, products/services and/or our supply chain.
The top two topics that are most important to our stakeholders for the reporting period ending 30 June 2024 are:
| Material Topic | Area of value chain responsible for external impact | Impact areas evaluated | Why the impact is relevant to external stakeholders | Related Impacts | Metrics used to measure the output of our business activity | Impact valuation | Quantitative impact metric |
|---|---|---|---|---|---|---|---|
| Customer Decarbonisation | Products and services | Environment Society Consumers/end-users |
Aotearoa’s long-term target of net zero emissions by 2050 means there is clear benefit to stakeholders and the environment from Meridian contributing to customer decarbonisation Meridian can help decarbonise commercial and residential energy use by creating products that support the increased use of electricity to replace fossil fuels and through better energy efficiency Meridian can contribute to the creation of a more reliable, decarbonised and cost-effective electricity system by maximising the potential of demand flexibility and virtual power plants. |
Reducing customer emissions |
1,000GWh of process heat under contract by 2030
Install additional 75 fast chargers by the end of FY25
|
Access to product/service with positive impact provided: reduced customer emissions | tCO2e (total customer emissions reduction) |
| Affordability | Products and services | Society Consumers/end-users |
Some New Zealanders face energy hardship and the risk of this affecting our most vulnerable customers is heightened by the current cost-of-living crisis. Energy hardship caused by factors such as housing quality, financial situation, energy literacy, energy efficiency and usage, means a population of consumers self-ration electricity or use it inefficiently driving unnecessary costs. This can contribute to a range of negative wellbeing outcomes such as poor physical and mental health and flow on effects to employment and academic achievement. For this reason, there is clear benefit to stakeholders when Meridian addresses energy hardship. In addition, we recognise that not everybody has the financial means to transition to electric at the same pace. By contributing to energy equity, Meridian can help to reduce costs for electricity users over the longer term. | Some New Zealanders experiencing energy hardship | Support 5,000 customers in hardship by June 2028 (1,467 at 30 June 2024) |
Social return on investment: Customer wellbeing and social benefit per $1 spent |
$1:$5.20 |
Tackling Zero is Meridian’s quarterly newsletter for people whose roles or studies are focused on sustainability, or for whom this is an area of interest. Each issue will offer Meridian’s insights into a topical sustainability issue, as well as stories on how we, our customers and supply chain partners are tackling sustainability. It also includes links to recent Meridian disclosures such as new policies and reports.