The Ministry of Business, Innovation and Employment (MBIE) and the Ministry for the Environment  (MfE) consultation document presents possible options for two important issues: 

Issue 1: Developing a licensing regime for climate-related disclosures (CRD) assurance practitioners

• Option 1: Continuing with the status quo i.e., no occupational licensing for CRD assurance practitioners
• Option 2: Co-regulation modelled on the Auditor Regulation Act 2011 (Auditor Regulation Act)
• Option 3: Direct regulation by the FMA.

Issue 2: Extending the scope of the climate statement assurance engagement 

• Option 1: Continuing with the status quo
• Option 2: A non-regulatory approach
• Option 3: Extending the assurance requirement to cover the whole climate statement from October 2028
• Option 4: Extending the assurance requirement to cover the whole climate statement from October 2028 and empowering the XRB to stagger the introduction of assurance requirements prior to this date.

Our key points are as follows:

• The status quo is not a viable option 
• The regime must be future proofed to go beyond climate to broader sustainability-related reporting
• We support the direct regulation of CRD assurance practitioners by the FMA
• We recommend public consultation on the draft amendment Bill containing the proposed CRD assurance practitioner licensing regime 
• We support extending the scope of the assurance engagement from greenhouse gas (GHG) emissions disclosures to the whole climate statement, but no earlier than October 2028
• The CRD assurance practitioner licensing regime should be established as soon as possible, and definitely before the scope of the climate statement assurance engagement is extended
• We do not support staggering the introduction of mandatory assurance requirements 
• We recommend a cost benefit analysis is undertaken to inform decision-making so that user need is appropriately balanced with preparer cost