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 support the External Reporting Board (XRB) taking on the role of developing climate reporting standards for New Zealand, and its work ensuring 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.
Further, the establishment of the International Sustainability Standards Board (ISSB) by the IFRS Foundation trustees and publication of the prototype climate standard will lead to a global baseline for climate disclosures. 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 encourage the XRB to engage closely with the newly established ISSB.
We support the principles-based and forward-looking approach that the XRB is taking in developing the standards. We are pleased that NZ CS 1 will form the beginning of a reporting framework for sustainability reporting in Aotearoa New Zealand. We encourage the XRB to consider the likelihood of a more broadly scoped framework when it makes key decisions about concepts and definitions to ensure such concepts and definitions will also be appropriate for the subject matter covered by the broader framework.
CA ANZ’s recent Retail Investor Confidence Survey revealed a growing appetite for climate-related information with over half (53%) saying this information is highly important to their investment decisions. Almost three in five (59%) of more than 750 Chartered Accountants responding to the 2021 Chartered Accountants IFRS Survey (report forthcoming) indicate that climate-related information is already important in the context of their role. This is largely because of the evolving impact of climate on business risk, opportunities, and profits, and accelerating moves toward greater corporate accountability on climate.
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.
Further details and our responses to the specific questions can be found in the submission itself.
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