The Financial Sector (Climate-Related Disclosures and Other Matters) Amendment Act 2021 amended the Financial Markets Conduct Act 2013 (the Act) to make it mandatory for some large entities to prepare and lodge climate-related disclosures.
These large entities are known as climate reporting entities (CREs) in the Act and the disclosures they must make are referred to as climate statements. Climate statements will be lodged with the Registrar of Financial Service Providers (the Registrar) on a new register.
Which entities are climate reporting entities (CREs)
Around 200 entities in New Zealand will be required to prepare and lodge climate statements. CREs include:
- Registered banks, credit unions, and building societies with total assets of more than $1 billion.
- Managers of registered investment schemes (other than restricted schemes) with greater than $1 billion in total assets under management.
- Licensed insurers with greater than $1 billion in total assets or annual gross premium income greater than $250 million.
- Large, listed issuers of quoted equity securities or quoted debt securities.
An equity issuer is large if the market price or fair value of all of its equity securities exceeds $60 million and a debt issuer is large if the face value of its quoted debt exceeds $60 million. Issuers listed on growth markets are excluded from the climate reporting entity definition.
The thresholds for each entity are calculated as at the balance date of their 2 preceding accounting periods.
Managers of registered investment schemes will be required to make disclosures on a fund-by-fund basis. This ensures investors receive the information needed to understand the impact of climate change on the future performance of their investment.
Entities incorporated overseas will be required to make disclosures if their New Zealand business is over the thresholds outlined above.
Climate statements
A climate-related disclosure is also referred to as a climate statement. Climate statements will need to follow the reporting standards that have been set by the External Reporting Board (XRB).
Roles and responsibilities
Registrar of Financial Service Providers (the Registrar).
The Registrar and the Companies Office are responsible for maintaining an online register of climate statements and collecting the related fees and levies.
- CREs will upload their climate statements to the register, and
- The general public will be able to search the register to view copies of each lodged climate statement.
Financial Markets Authority (FMA)
The FMA is responsible for independent monitoring and enforcement of the climate-related disclosures regime — providing guidance about compliance expectations and reporting on monitoring activities and findings.
External Reporting Board (XRB)
XRB are responsible for developing the reporting standards that each CRE must follow when compiling their climate statements. In December 2022 XRB published Aotearoa New Zealand Climate Standards. They are also producing additional material to help support CREs apply the new standards.
Getting ready for lodging climate statements
We are getting the Climate-related Disclosures Register ready so that CREs will be able to lodge their climate statements from early 2024.
To lodge climate statements each CRE will need an online account specifically for this register. We will email each CRE ahead of time to help them get set up.
When information will be available for searching
Once CREs begin lodging their climate statements these will be available for searching. Any member of the public will be able to search the register free of charge.
More information will follow
Over the coming months we will update the information here.
Check back for the latest information on the Climate-related Disclosures Register.
Published 14 September 2023