Chartered Accountants Australia and New Zealand (CA ANZ) has responded to the External Reporting Board’s (XRB) Draft Climate Reporting Roadmap, supporting the proposed transition from the New Zealand Climate Standards (NZ CS) to a new NZ IFRS S2 based on IFRS S2.

CA ANZ considers that moving to an internationally aligned framework would provide a more sustainable basis for New Zealand’s climate reporting regime. It would improve comparability and decision-usefulness for users of climate-related information, while reducing the complexity and duplication that can arise for entities operating across jurisdictions. 

Close Trans-Tasman interoperability is an important part of this approach. CA ANZ supports alignment with AASB S2 where appropriate, while noting that New Zealand should not replicate Australian legislative settings simply for the sake of harmonisation. New Zealand-specific modifications should be limited to those that are justified by the local context. 

Practical implementation is a key consideration. CA ANZ recognises that moving from NZ CS to NZ IFRS S2 will involve costs for climate reporting entities, including changes to systems, processes, controls, measurement approaches and capability. However, entities already have established climate reporting processes and experience, so the transition should not involve the same level of effort as introducing climate reporting for the first time. Clear guidance from the XRB will be important in helping entities understand the differences between the frameworks and progressively prepare for the transition. 

CA ANZ also highlights the importance of avoiding unnecessary divergence from IFRS S2. It supports retaining the requirements and proportionality mechanisms in IFRS S2, while supporting a flexible approach to industry-based disclosures during the transition. The submission also supports retaining flexibility in scenario analysis rather than introducing additional New Zealand-specific requirements that are not part of IFRS S2. 

CA ANZ considers the proposed transition timeline should be brought forward. It supports early adoption from 1 October 2027, rather than 1 October 2026, and considers 2030 a more appropriate mandatory application date than 2033. This would provide sufficient time for finalisation and implementation while avoiding an unnecessarily prolonged period of parallel frameworks. 

The submission also addresses the uncertainty created by the Financial Markets Conduct Amendment Bill not passing and the resulting extension of the FMA 'no action' relief for affected climate reporting entities. CA ANZ recommends that the final roadmap recognise this uncertainty while continuing the transition to IFRS S2, regardless of where the reporting threshold ultimately lands. 

CA ANZ calls for practical ‘how to’ guidance and examples to support implementation and help entities transition effectively to the new framework.