Last year Meridian made a commitment to becoming a carbon neutral company by formally offsetting carbon emitted by the company in the course of business. To achieve this, we embarked on a study to clarify the parameters of our emission liability and to provide methodologies to measure and offset our emissions.

As part of this process, we engaged the PricewaterhouseCoopers Climate Change team to guide us on international best practice in carbon accounting, and to review and recommend carbon offset opportunities.

We selected Landcare Research's carboNZero programme. We believe it is the best on offer in New Zealand as it stems from Landcare Research's objective and scientifically robust research around carbon emission inventories. The carboNZero programme itself is aligned with international benchmarks (ISO 14064), checks emissions management plans and mitigation intentions, and requires external auditing.

We began our journey toward carbon neutrality by ring-fencing and certifying the Meridian facility, responsible for the core activity of generating and retailing electricity from renewable sources. While this is arguably the easiest – and cheapest – part of Meridian's business to certify we felt that is was a reasonable first step to take as it accounts for the majority of our revenue, and involves the greatest number of our stakeholders.

Separating the Meridian Group into individual 'facilities' will enable us to transition towards carbon neutrality across the group in a staged and measured way over the next few years.

What is certified?

Meridian has been issued a certificate that reads:

This is to certify that Meridian Energy Limited in respect of its Meridian Energy Facility Meets the requirements of carboNZeroCert TM certification having measured and reduced its greenhouse gas emissions and neutralised the remaining unavoidable emissions in respect of all the electricity supplied to customers of the Meridian Energy Facility and the renewable generation, corporate and retail activities related to this product.

Conditions of issue

• This certificate has been issued following a certification process administered by Landcare Research which includes:
  • Measurement and calculation of emissions
  • Specification of scope of business activities emissions offset against
  • Demonstration of commitment to reduce emissions
  • Purchase and cancellation of approved carbon credits equivalent to the amount of emissions calculated
  • External verification
• The carbon credits purchased by the certificate holder cannot be traded – to do so would invalidate their carboNZeroCertTM Programme certification.
• This certificate is issued to cover the time period recorded on this certificate and the scope of emissions specified in the certificate holder's carboNZeroCertTM Application Form.
• Landcare Research does not warrant the accuracy of any claims made by the certificate holder that are outside the terms of agreement signed between Landcare Research and the certificate holder.

How did you determine individual 'facilities'?

During the course of preparing for carboNZero certification, Meridian's greenhouse gas (GHG) inventory was reviewed and revised in accordance with relevant international protocols and standards (parts 7.3.1 and 7.3.2 of the requirements of ISO 14064-1).

The organisational boundaries of the Meridian Group were determined through a review of the different activities of Directorates and subsidiaries, to ensure completeness of all emission sources, removals and reductions. The activities and emissions were then categorised into 'facilities'.

The first 'facility' to have an inventory prepared, audited and certified is the Meridian Energy facility.

What emission sources are included in the audited Meridian Energy facility?

The audited and certified facility includes all the activities that support the generation and retail of energy from renewable sources within New Zealand.

Where quantification of direct or indirect GHG emissions sources is immaterial, not technically feasible or cost effective, the exclusion of the emissions is disclosed in the inventory. The Meridian facility inventory excludes emissions from waste and contractors and emissions embodied in concrete and turbines. Meridian recognises that significant emissions do result from building and construction projects. While we do not account for them in our inventory, we do work with suppliers to ensure that the emissions as a result of work for Meridian are managed and minimized where possible.

The geographic location is limited to New Zealand.

What emission sources are not included in the audited Meridian Energy facility?

Agricultural emissions from the four farms that Meridian owns and has sharemilking arrangements with are excluded. These form a separate facility and emissions from these sources are not recorded because it is not yet technically feasible or not cost effective to calculate emissions from farming operations. This approach will be reviewed as more information about carbon accounting practices in agriculture become available.

Business unit Energy for Industry has also been identified as a separate facility. Energy for Industry provides energy solutions for large industrial and institutional sites, from thermal generation including gas, coal, diesel, bio-gas. Its energy generation is deemed to be sufficiently different from electricity generation from renewable sources that it is defined as a separate production process and separate 'facility'. Its emissions therefore are outside the scope of the Meridian Energy facility.

Meridian's other subsidiary companies, Arc Innovations and Whisper Tech also both operate with significantly different purposes and are identified as separate facilities.

Contractors' emissions have also been excluded. While this is normal practice, Meridian recognises that significant emissions do result from building and construction projects. While we do not account for them in our inventory, we do work with suppliers to ensure that the emissions as a result of work for Meridian are managed and where possible, minimised.

Financial instruments such as contracts for difference, and agency relationships such as Meridian's grid-connected customers with Market Services Agreements, are not covered by the emissions accounting process.

When will the other facilities become certified carbon neutral?

We are committed to achieving carbon neutrality on a company wide basis and are working on a methodology to reach this goal.

How are you managing your emissions?

Meridian has an emissions management plans that set targets and initiatives to reduce overall emissions.

The plans have been developed on two levels:

• Direct initiatives to reduce the number and volume of emissions sources

These include:

• Managing and reducing the fuel used in vehicles, boats and stand-by generators
• Managing and reducing the amount of air travel undertaken
• Reducing the amount of electricity used in office operations
• Minimising waste to landfill and maximising recycling efforts; and
• Incorporating carbon considerations into everything we do, specifically reducing the carbon intensity of communicating with our customers, and in planning for future projects.
• Actions to help reduce the emissions from New Zealand as a whole

This relates to gaining and protecting access to renewable energy sources for electricity generation, and using Meridian's considerable reach and influence to encourage other New Zealanders to reduce their emissions.

While the plan has been developed specifically for the Meridian Energy facility as outlined above, it has been shared with the parts of the business that are currently outside that scope and they are implementing many of the initiatives also.