Date posted: 21/11/2019

Consultation start to bridging NZ climate-related financial risk information gap

A new climate-related financial risks reporting regime will raise awareness of risks facing businesses, investors, lenders and insurers.

In brief

  • Government seeking feedback on mandatory climate-related financial disclosures
  • CA ANZ welcomes discussion document
  • CA ANZ supports appropriate climate-related disclosures and reporting for decision making

Karen McWilliams, Business Reform Leader for Chartered Accountants Australia and New Zealand welcomes the Coalition Government’s consultation document on a new regime requiring companies to assess and report their climate-related financial risks.

“New Zealand has fallen behind in awareness of the climate-related risks facing businesses, creating an information gap for investors, lenders and insurers,” she comments.

“Around the world, businesses often have a clear road map guiding them on what to report, and where.

“In New Zealand much remains uncharted. This consultation is the beginning of the formal dialogue around how best to close the gap in the New Zealand business landscape.”

McWilliams notes a critical driver of the change in Australia is a landmark legal opinion in 2016 illustrating Australian legal requirements on company directors to consider, disclose and respond to climate change. 

“The just-released legal opinion by the Aotearoa Circle says climate change is a foreseeable risk of financial harm to many businesses and directors and that managers have a responsibility to treat climate risk the same as any other financial risk.”

McWilliams also notes CA ANZ is a strong advocate for appropriate climate-related disclosures and reporting for decision making. 

“Around the world, businesses often have a clear road map guiding them on what to report, and where.” 
Karen McWilliams, Business Reform Leader

“In our experience, there is a general lack of awareness and understanding in the broader business community regarding climate change-related risks and opportunities.”

The Government’s consultation, jointly run by the Ministry of Business and the Ministry for the Environment, runs until Friday 13 December.

This consultation follows on from the Productivity Commission’s recommendations in a 2018 report that a “mandatory (on a comply-or-explain basis), principles-based, climate-related financial disclosures” regime be implemented by way of a “standard under section 17(2)(iii) of the Financial Reporting Act 2013”, and which should be both “audited and accessible to the general public”. 

During the consultation period, the Government is seeking feedback on proposals regarding how best to give effect to this recommendation.

Climate-related financial disclosures: Our proposals, your views

The Ministry for the Environment is keen to get feedback on the proposals.

How to review the proposals and submit feedback