Date posted: 12/05/2022

Submission on strategy and metrics and targets consultation document

The External Reporting Board called for submissions on the Strategy, and Metrics and Targets Consultation Document

The External Reporting Board called for submissions on the Strategy, and Metrics and Targets Consultation Document.

CA ANZ continues to be an advocate for, and supporter of, appropriate climate-related financial disclosures and reporting for decision-making. Better disclosure will facilitate more informed decision making, while enabling market forces to drive efficient allocation of capital and support a smooth and just transition to a net zero greenhouse gas emissions economy.

We continue to support the External Reporting Board (XRB) taking on the role of developing climate reporting standards for New Zealand, and its work to ensure that these standards align with international developments. 

In particular, we support the close alignment to the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD). However, we consider it important for the XRB to identify where deviations are needed from the TCFD to tailor Aotearoa New Zealand Climate Standard 1: Climate-related Disclosures (NZ CS 1) for the New Zealand environment. 

For completeness, we note that the International Sustainability Standards Board’s (ISSB) consultation on climate and sustainability-related disclosure standards is the next step towards a global baseline. Global capital markets will expect entities to provide disclosures in line with ISSB standards and therefore it will be critical that NZ CS 1 meets this global baseline at a minimum. On this basis, we support and encourage the XRB’s ongoing engagement with the ISSB. 

We support the principles-based and forward-looking approach that the XRB is taking in developing the standards. We hope that NZ CS 1 will form the beginning of a broader reporting framework for organisations in Aotearoa New Zealand. 

We encourage the XRB to continue to consider the future likelihood of a more broadly scoped framework when making key decisions about concepts and definitions to ensure such concepts and definitions will also be appropriate for subject matter beyond climate. A more broadly scoped framework could be the result of extending the number of entities that are captured or an expansion of the requirements, which could result in already captured entities having a secondary compliance burden.

The accounting profession is ready and able to play a key role in ensuring transparency and appropriate disclosure of climate-related risks and opportunities, which will maintain and enhance financial stability. 

Our responses to the specific questions raised in the Consultation Document can be found in the submission below. 

About Climate-related disclosures consultation

Find out more about the consultation here

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Submission on the XRB’s Governance and Risk Management Consultation Document

CA ANZ’s submission on the first part of the XRB’s climate-related disclosures consultation.

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