Yesterday, Minister for Climate Change James Shaw announced that New Zealand will implement mandatory climate risk reporting in line with the TCFD recommendations, becoming the first country to do so.
“New Zealand has made a leap in the right direction to safeguard its businesses and financial market for the future” said Michael Zimonyi, Policy & External Affairs Director, CDSB, noting that “Now the real work begins of ensuring that businesses have the skills needed to implement these new requirements and CDSB has been, and will continue to be there to support them.”
Yesterday, CDSB reaffirm its support to New Zealand businesses by providing implementation training workshops free of charge, as well as reacting to the needs of the market, for example by producing country-specific guidance and a dedicated course on the TCFD Knowledge Hub, which it hosts on behalf of the Task Force, to ensure that report preparers have the support they need to prepare high-quality, decision-useful disclosures.
Over the past years, the Climate Disclosure Standards Board has been working to support the Government of New Zealand and its market as it embarked on assessing the viability of implementing the Task Force’s recommendations. Together with the McGuinness Institute and Simpson Grierson, CDSB has co-hosted capacity-building workshops to market participants and co-organised an online forum with former Bank of England Governor Mark Carney, Minister Shaw and Reserve Bank of New Zealand Governor Adrian Orr.
Overview of requirements
The new climate reporting requirements will apply to:
- All registered banks, credit unions, and building societies with total assets of more than $1 billion
- All managers of registered investment schemes with greater than $1 billion in total assets under management
- All licensed insurers with greater than $1 billion in total assets under management or annual premium income greater than $250 million
- All equity and debt issuers listed on the NZX
- Crown financial institutions with greater than $1 billion in total assets under management, such as ACC and the NZ Super Fund
Overseas incorporated organisations would also be required to disclose in their New Zealand annual reporting.
The $1 billion threshold will make sure about 90 per cent of assets under management in New Zealand are included within the disclosure system.
The External Reporting Board (XRB) will develop one or more reporting standards, which entities may either comply with, or if they do not comply, explain why not.
The Financial Markets Authority will be responsible for independent monitoring, reporting and enforcement.
If approved by Parliament, financial entities could be required to make disclosures in 2023 at the earliest.