The Ministry for the Environment and the Ministry of Business, Innovation and Employment called for submissions on the discussion document covering climate-related financial disclosures.
Key points from our submission, lodged on 13 December 2019 include:
- We are a strong advocate for appropriate climate-related disclosures and reporting for decision making.
- To avoid recurrence of the compliance issues referred to above, we strongly recommend that, prior to implementing an entirely new regime, regulators seek to understand and address the reasons for noncompliance with the existing regime (which includes an existing fiduciary duty on directors to report on material issues).
- We consider the Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD) recommendations provide a strong foundation for determining the climate-related financial disclosures needed to inform the market. However, we consider these recommendations should form a subset of a wider external reporting framework which encompasses other forward-looking business risks.
- To the extent a new regime is introduced, comprehensive education must be put in place to raise awareness. Also critical will be effective monitoring and enforcement, to ensure that appropriate reporting is carried out.