Mandatory reporting

In 2021, New Zealand became the first country in the world to introduce legislation requiring mandatory climate-risk reporting. The legislation is intended to:

• promote a more efficient allocation of capital in light of the potential impacts of climate change;

• help with the transition to a sustainable and low-emissions economy; and

• ensure that companies consider and understand the financial impacts of climate-related risks and opportunities.

WHO IS REQUIRED TO REPORT?

The mandatory reporting regime applies to “climate reporting entities”. Although the regime is targeted at the financial sector, a relatively broad range of entities fall within the scope of the regime. The regime applies to:

NZX listed issuers of:

- quoted equity securities, where the issuer has equity securities (quoted or unquoted) with a total value exceeding NZ$60 million

- quoted debt securities with a total face value of exceeding NZ$60 million

All registered banks, credit unions, and building societies with total assets of more than NZ$1 billion

All managers of registered investment schemes (other than restricted schemes) with greater than NZ$1 billion in total assets under management

All licensed insurers with greater than NZ$1 billion in total assets or annual premium revenue greater than NZ$250 million

The regime is expected to apply to approximately 200 entities and capture 90% of assets under management in New Zealand.

Crown financial institutions with greater than NZ$1 billion in total assets under management are also expected to produce climate-related disclosures (because of a letter of expectation from their relevant minister).