Director preparation guide

This guide provides an overview of Aotearoa New Zealand’s
Climate-related Disclosures and key considerations for directors.

Download the PDF version of this page here: 

step closer towards a low-emissions future and a cleaner safer planet for future generations ​  

Aotearoa New Zealand’s climate-related disclosures framework intends to ensure the impacts of climate change are actively considered in business and investment decisions and that entities demonstrate accountability and foresight in relation to climate-related risks and opportunities. This should lead to a smarter, more efficient allocation of capital, and help smooth the transition to a more sustainable, low-emissions economy. 

Who needs to report?

Entities that are required by the climate-related disclosures legislation to produce climate statements will be known as climate reporting entities (CREs). The following entities are CREs:

  1. Large listed issuers with a market capitalisation exceeding $60 million; and
  2. Large financial entities, including banks, insurers and managers of investment schemes with total assets exceeding $1 billion.

Approximately 200 CREs are expected to disclose in the first year of reporting. If there is any uncertainty as to whether an entity is a CRE, we recommend getting independent legal advice, and if there is still any remaining uncertainty, speaking with the FMA.

When does reporting start?

Example timline for an entity with a 31 March balance date:


The Aotearoa New Zealand Climate-related Disclosures Framework

The climate-related disclosure framework comprises three Aotearoa New Zealand Climate Standards that have been designed as a package. It is important they are read in context of each other.

NZ CS 1 Climate-related Disclosures contains the climate-related disclosure requirements for each of the four thematic areas (Governance, Strategy, Risk Management and Metrics and Targets) and the assurance requirements for greenhouse gas emissions disclosures.

NZ CS 2 Adoption of Aotearoa New Zealand Climate Standards provides optional adoption provisions.

NZ CS 3 General Requirements for Climate-related Disclosures contains the principles, the underlying concepts such as materiality, and the general requirements.



The Governance section is about enabling primary users (existing and potential investors, lenders and other creditors) to understand both the role an entity’s governance body (e.g., a board, or an investment committee) plays in overseeing climate-related risks and climate-related opportunities, and the role management plays in assessing and managing those climate-related risks and opportunities.  

The disclosures focus on the directors’ role, as part of the entity’s governance body, in providing oversight of climate-related risks and opportunities. The disclosures include providing information on how the governance body considers climate-related risks and opportunities when developing and overseeing implementation of an entity’s strategy, and how the governance body ensures that the appropriate skills and competencies are available to provide oversight. 

Risk Management

The Risk Management section is about enabling primary users to understand how an entity’s climate-related risks are identified, assessed and managed and how those processes are integrated in existing risk management processes. 

Directors will need to have a good understanding of both transition and physical risks and, in relation to the Strategy disclosures, how identified risks will impact the entity’s business model, strategy and financial planning.

This integration of climate-related risks into existing risk management processes is important and will require directors to get more familiar with climate risk terminology.

This includes concepts like hazard, vulnerability and exposure, which are a fundamental part of the way the Intergovernmental Panel on Climate Change talks about existing and future climate-related risk. 


The Strategy section is about enabling primary users to understand how climate change is currently impacting an entity and how it may do so in the future. 

This section requires an entity to identify its climate-related risks and opportunities (both transition risks like policy, reputational and market shifts, and physical risks like extreme weather events). It requires disclosure of current and anticipated impacts including financial impacts. It also contains the disclosure requirements around scenario analysis. Directors can read the XRB’s two pager on scenario analysis to get familiar with what it is and isn’t, and what the specific intent of scenario analysis is within this regime. 


Metrics and Targets

The Metrics and Targets section is about enabling primary users to understand how an entity measures and manages its climate-related risks and opportunities. 

Entities are required to disclose scope 1,2 and 3 greenhouse gas (GHG) emissions. Legislation requires these to be assured. Directors should understand how an entity can get started on measuring its emissions, and ways to reduce an entity’s emissions footprint. 

First-time adoption provisions

In recognition that it may take time to develop the capability to produce high-quality climate-related disclosures, and that some disclosure requirements, by their nature, may require an exemption, NZ CS 2 provides a limited number of adoption provisions from the disclosure requirements in Aotearoa New Zealand Climate Standards. CREs may elect to use one or more of the adoption provisions contained in NZ CS 2. Some adoption provisions exempt certain disclosures whereas other adoption provisions require alternative information to be disclosed. If a CRE elects to use any of the adoption provisions it must disclose their use.

Directors should consider whether these adoption provisions are suitable for their CRE to elect to use.

General requirements and principles

NZ CS 3 establishes principles and general requirements to enable the provision of high-quality climate-related disclosures. These principles and requirements must be considered when applying the disclosure requirements in NZ CS 1 and NZ CS 2.

NZ CS 3 is centered on the principle of fair presentation and includes several other principles that entities must consider, including relevance, balance and accuracy.

NZ CS 3 also contains general requirements such as, requirements pertaining to the location of disclosures and requirements relating to the application of materiality to disclosure requirements.

Directors are strongly encouraged to become familiar with the principles and requirements in NZ CS 3 including the materiality requirements and their implications for reporting.




Directors play a critical role in providing high-level strategic oversight of an entity’s climate-related disclosures. The intent is that directors consider the regime in the wider context of their entity’s purpose, strategy and operations, over the short, medium and long term. 

Importantly, this means that directors should be considering climate-related risks and opportunities in an integrated way with relevant aspects of their entity’s strategy and operations. 

Specific requirements

The CRD legislation also identifies specific requirements of directors in relation to the climate-related disclosures framework. These include: 

  • Dating and signing on behalf of the entity, the entity’s climate statement or group climate statements; 
  • Complying with applicable climate standards (there is potential civil and criminal liability for contraventions of the CRD regime as set out in the new Part 7A of the FMCA 2013); and 
  • Providing information and explanations to assurance practitioners relating to GHG emissions.


CREs are required to: 

  • Prepare an annual climate statement that discloses information about the effects of climate change on their business or any fund they manage; 
  • Prepare climate statements in accordance with climate standards issued by the XRB; 
  • Obtain independent assurance about the part of the climate statement that relates to the disclosure of GHG emissions; 
  • Make the climate statements available to the public; and  
  • Comply with record-keeping requirements. 

Standard settings

The XRB is responsible for setting the disclosure requirements against which CREs must report. The disclosure requirements are contained in mandatory standards, and the XRB will also produce non-mandatory guidance to help CREs disclose against the standards. The XRB is intending to continue with its work increasing awareness relating to climate-related disclosures into 2023 and beyond.

Read more on Climate-related Disclosures

Contact our Climate-related Disclosures Team


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.  

The FMA envisages taking a broadly educative and constructive approach, with a focus on issuing high-level guidance on compliance expectations in the early stages, moving to a proactive regulatory role as the climate-related disclosures regime becomes established. 

Read the implementation approach

Contact our Climate-related Disclosures Team