Climate change risk brought to account

19 November 2019

The Government is proposing to require annual climate related financial disclosure (on a comply or explain basis) for listed issuers, banks, general insurers, institutional investors and investment managers.

Consultation on the proposal closes on Friday 13 December.

Broad approach

The approach would be in line with the 2017 recommendations of the G20 Task Force on Climate Related Financial Disclosures (TCFD). This requires affected organisations to disclose how they manage their specific climate-related risks (including governance, strategy, and risk management details) with reference to specific metrics and targets.

We expect that similar disclosure through another TCFD-aligned reporting framework (e.g. GRI, CDP, CDSB, IIRF) would also be accepted. A chart comparing the TCFD requirements with other frameworks is available here.


Current indications are that entities with a March balance date will first need to report for the year ending 31 March 2023 (30 June 2023 for June balance dates).


There is no convincing explanation in the consultation on why the scope should be limited to listed issuers, banks, general insurers, asset owners and asset managers other than that is what TCFD has already decided.

Non-disclosure would be permitted in Year One only (subject to explanation) and in subsequent years only where the entity can demonstrate that it is not being materially affected by climate change. The consultation asks whether an exclusion from this requirement should be available for smaller entities.

For listed issuers, the TCFD proposals would supplement the current NZX Governance Code recommendation 4.3. This provides that “an issuer should provide non-financial disclosure at least annually, including considering material exposure to environmental, economic and social sustainability risks and other key risks”. 

Associated NZX commentary states that “if an issuer chooses a formal framework to report on ESG factors, it should report against a recognised international reporting initiative, such as the Global Reporting Initiative guidelines or Integrated Reporting”.

Daniel Kalderimis and Nicola Swan have been invited to participate in the consultation seminars. These will be held in main centres from 25 to 27 November and will be led by the Ministry for the Environment and the Ministry for Business Innovation and Employment.

Do let us know if it would be useful to speak before or after these sessions, to hear the feedback provided, or to consider a more formal submission.

Our thanks to Nicola Swan for writing this update.

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