The New Zealand government has announced a set of changes to its climate-related disclosure (CRD) regulations, including raising the reporting threshold to exempt smaller companies and reducing liability risks for company directors.
Launched in 2021, the CRD regime initially required banks, credit unions, insurers, and investment scheme managers with over USD $575 million ($1 billion NZD) in assets, as well as issuers of listed equity or debt securities with a market cap or debt face value exceeding NZD $60 million ($34.5 million USD), to report annually on climate-related risks and opportunities. Reporting began in 2024 for the 2023 fiscal year.
Commerce and Consumer Affairs Minister Scott Simpson noted that mandatory climate reporting had imposed substantial costs on listed companies, with some spending up to $2 million on compliance. Simpson also highlighted that reporting costs and risks may be discouraging new listings, pointing out that only 34 companies have listed on the NZX since 2020, while 37 have delisted.
Under the proposed changes:
· The market cap/debt threshold for listed issuers will rise from NZD $60 million to NZD $1 billion.
· Managed investment schemes will be removed from the CRD scope.
· The number of reporting entities is expected to drop by about half, according to a government fact sheet.
· Personal liability for directors over CRD breaches will be removed, though liability for misleading or deceptive conduct or false statements will remain.
· Companies will not be required to provide the same level of evidence for climate disclosures as for financial reporting, recognizing that climate reporting involves future-focused and uncertain information, unlike historical financial data.
The government plans to pass legislation implementing these changes in 2026.
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