28 July 2022
Shedding sunlight on climate risks and opportunities
Today the External Reporting Board (XRB) has released their final consultation on the Climate related Disclosure standards which around 200 of New Zealand’s largest entities will need to report against from next year.
Development of the reporting regime followed the Government’s announcement of its intention to introduce a world-first mandatory climate reporting regime. Currently, New Zealand’s largest entities provide limited information on how climate change could impact their future operations.
XRB Chief Executive April Mackenzie says today’s release is a significant milestone towards ensuring the effects of climate change are actively and routinely considered in business, investment, and lending decisions.
“Climate disclosures bring climate-related risks and opportunities front and centre so that entities are prompted to think about their strategy and business model and assess whether they can continue to create value in the long term, or whether they need to adapt.”
Mackenzie stresses that investors and shareholders are increasingly demanding greater transparency through the disclosure of climate-related risks and opportunities.
“The disclosures are about transparency and trust. These sit at the heart of decision making—for investors and the entities themselves.
Ultimately, it’s about driving investment and capital away from high-emissions activities and towards low-emissions activities. We are confident the disclosure regime we’ve developed will support that transition.” says Mackenzie.
The XRB’s consultation closes 26 September 2022 – further information can be found here.
Media contact: Emily.marden@xrb.govt.nz 0274140340
5 April 2022
XRB appoints ESG specialist as Chair of Auditing and Assurance Standards Board
The Chair of the External Reporting Board (XRB), Michele Embling has today announced the appointment of Marje Russ as Chair of the XRB’s Auditing and Assurance Standards Board. Ms Russ will replace outgoing Chair Robert Buchanan who ends a 6-year tenure as Chair at the end of June.
“We’re extremely grateful for Robert’s years of dedication and the public interest focus he brought as Chair and are delighted to welcome Marje into the role,” says Ms Embling.
Ms Russ has been a member of the XRB’s Auditing and Assurance Standards Board since 2013 and previously represented the XRB as an advisory panel member on the International Auditing and Assurance Standards Board’s project to develop guidance on Extended External Reporting (EER), which was published in April 2021.
Ms Russ has a background in environmental and resource management with expertise in environmental planning/policy-setting, environmental certification and assurance, and risk management and governance.
Ms Russ stepped down from an 11-year Board Director position for Tonkin & Taylor Group Ltd in 2021 and continues in a consulting role as Technical Director Environment and Sustainable Business. She has recently been appointed to the board of Manaaki Whenua: Landcare Research.
For further information about the XRB and the Auditing and Assurance Standards Board, click here.
16 March 2022
New Zealand a step closer towards Climate reporting
Today, the External Reporting Board has released the second part of the Climate-related Disclosure standards for public consultation. This release focuses on Strategy, and Metrics and Targets which combined, outline how entities need to assess current and future climate risks and opportunities and report on corresponding financial implications.
“These are challenging but critical topics that will require reporting entities to think about developing and implementing new processes,” says XRB Board Chair Michele Embling.
The Strategy section looks at the impacts of climate risks and opportunities on an entity’s business model, strategy and financial planning over the short, medium, and long term, including actual and potential financial impacts.
“Entities will need to look at various possible future scenarios and test the resilience of their business model and strategy to form a realistic picture of potential future performance.
The proposed Targets and Metrics section details how entities will report on measuring and managing climate risks and opportunities.
“These disclosures will mean information users, such as investors, will have sight of an entity’s potential risk-adjusted returns, their ability to meet financial obligations, and have a good idea of how they are managing or adapting to climate risks and opportunities.” Added Ms Embling
The FMA, who are responsible for compliance and enforcement of the reporting regime, has signalled realistic expectations in its implementation approach.
“We recognise that reporting entities won’t achieve perfection on day one, so our compliance expectations will be focused on supporting entities to meet the new reporting requirements”, said FMA Acting Director of Capital Markets Paul Gregory.
Development of the climate reporting standards follows the announcement in 2020 to introduce a mandatory reporting regime for key New Zealand companies including large, listed issuers and financial sector entities.
Consultation closes 13 April.
See the consultation document here.
View the launch slides here.
Media contact: Emily.marden@xrb.govt.nz 0274140340
Editor's note: The closing date for the consultation has subsequently been changed to 2 May 2022.
