Mandatory climate-related disclosures

Consultation open: Capital Markets Reforms

The Government is seeking public feedback on potential adjustments to the climate-related disclosures regime. Consultation closes on 14 February 2025.

Find out more and have your say

Purpose of mandatory reporting

Mandatory reporting of climate-related disclosures will help to address climate change risks outlined in the National Climate Change Risk Assessment by making our financial system more resilient. It will also help New Zealand meet its international obligations to achieve the target of net zero emissions by 2050.

National climate change risk assessment for New Zealand - Main report(external link) — Ministry for the Environment

The goal of mandatory climate-related disclosures is to:

• ensure that the effects of climate change are routinely considered in business, investment, lending and insurance underwriting decisions;
• help climate reporting entities better demonstrate responsibility and foresight in their consideration of climate issues; and
• lead to more efficient allocation of capital, and help smooth the transition to a more sustainable, low emissions economy.

Legislation for mandatory climate-related disclosures

Part 7A of the Financial Markets Conduct Act 2013 now requires some financial market participants to make climate-related disclosures in annual climate statements. The first disclosures are now publicly available on the Companies Office Climate-related Disclosures Register.

Climate-related Disclosures Register(external link) — New Zealand Companies Office

Financial Markets Conduct Act 2013(external link) — New Zealand Legislation

Compliance with the mandatory reporting requirements

Organisations that must make disclosures

Around 170 financial market participants in New Zealand will be required to produce climate-related disclosures. These climate reporting entities include:

• All registered banks, credit unions, and building societies with total assets of more than $1 billion. 
• All managers of registered investment schemes (other than restricted schemes) with greater than $1 billion in total assets under management.
• All licensed insurers with greater than $1 billion in total assets or annual gross premium revenue greater than $250 million.
• Large listed issuers of quoted equity securities or quoted debt securities. An equity issuer is large if the market price of all of its equity securities exceeds $60 million and a debt issuer is large if the face value of its quoted debt exceeds $60 million. Issuers listed on growth markets are excluded from the climate reporting entity definition.

Managers of registered investment schemes must make disclosures on a fund-by-fund basis. This ensures investors receive the information needed to understand the impact of climate change on the future performance of their investment.        

Overseas incorporated organisations will be required to make disclosures if their New Zealand business is over the thresholds outlined above.

The thresholds will be increased from time to time to reflect the movements in the consumers price index.

Reporting standards

Climate reporting entities report against standards issued by the External Reporting Board (XRB).

Aotearoa New Zealand Climate Standards(external link) (15 December 2022) — XRB

The standards were developed largely in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD recommendations are a leading framework for climate-related disclosures internationally. The recommendations are structured around 4 thematic areas that represent core elements of how organisations operate: 

• governance
• strategy
• risk management
• metrics and targets.

Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures(external link) (June 2017) — TCFD

Regulations to support the climate-related disclosures regime

The Financial Markets Conduct Regulations 2014 and the Financial Markets Authorities (Levies) Regulations 2012, provide:

• the manner in which climate records need to be kept and made available for inspection;
• fees for filing and infringement fees for non-compliance with record keeping obligations; and
• technical requirements relating to the functioning of the Climate-related Disclosures Register.

Financial Markets Conduct Regulations 2014(external link) — New Zealand Legislation

Financial Markets Authority (Levies) Regulations 2012(external link)  — New Zealand Legislation

Assurance Requirements

Assurance over greenhouse gas emissions

Climate reporting entities must ensure that the parts of their climate statements relating to greenhouse gas emissions are independently assured for financial years ending on or after 27 October 2024. An assurance report must be lodged with the climate statement.

Past consultations

MBIE and the Ministry for Environment (MfE) publicly consulted on the future of assurance obligations for climate reporting entities, asking:

• Whether there should be an occupational licensing regime for “CRD assurance practitioners”.
• Whether the scope of the assurance requirement should be extended to assurance over all disclosures in the climate statements.

This consultation closed on 10 February 2023. MBIE and MfE are now analysing submissions to inform future decisions on assurance obligations.

Monitoring, supervision and enforcement of the regime

The Financial Markets Authority (FMA) is responsible for the independent monitoring, supervision and enforcement of the climate-related disclosures regime. The FMA have committed to taking a constructive and educative role in the early stages of implementation. The first year will focus on setting initial compliance expectations, the second year will aim to support development of best practice, and the third year will aim to be a steady state of guidance, monitoring and enforcement. The FMA have published guidance around their oversight approach for the first three years of the regime, as well as other guidance materials for climate reporting entities on their record-keeping obligations, and information on exemptions, which can be found at the below link.

Climate Reporting Entities(external link) — FMA

Development of the legislation

Development of the Bill

In October 2019, MBIE and MfE released for public comment, a discussion document setting out the rationale and initial proposals for the regime. Feedback from the consultation informed the Cabinet paper submitted in August 2020, seeking approval to introduce mandatory climate-related disclosures in New Zealand.

• Climate-related financial disclosures discussion document(external link) — Ministry for the Environment website
• Climate-related financial disclosures: summary of submissions(external link) — Ministry for the Environment
• Cabinet paper: Climate-related financial disclosures(external link) — Ministry for the Environment
• Regulatory impact assessment: Climate-related financial disclosures(external link) — Ministry for the Environment
• Low emissions economy report(external link) — New Zealand Productivity Commission

In April 2021, Cabinet approved for introduction the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill.

Development of the Regulations

To ensure that the regime operates as intended, Cabinet agreed to introduce regulations to support the regime.