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Final consultation on XRB climate reporting standard

29 July 2022

The XRB yesterday launched its final consultation on the mandatory climate-related disclosures regime to come in from next year. Submissions are open to 26 September.

Feedback is sought on:

  • Aotearoa New Zealand Climate Standard 1 (NZ CS 1): Climate-related disclosures
  • Aotearoa New Zealand Climate Standard 2 (NZ CS 2): First-time Adoption of Aotearoa New Zealand Climate Standards
  • Aotearoa New Zealand Climate Standard 3 (NZ CS 3): General Requirements for Climate-related disclosures
  • draft staff guidance for all sectors, and
  • draft staff guidance for Managed Investment Scheme managers.

XRB has also released an accompanying discussion document and comparison tables showing the main similarities and differences with the Taskforce on Climate-related Financial Disclosure (TCFD) and the International Sustainability Standards Board (ISSB) draft climate standard. All can be accessed here.

Key areas where XRB has moved position include:

  • reporting entities will now be required to report against three scenarios: 1.5 degrees, at least 3 degrees (up from 2 degrees), and one further scenario of the entity’s choosing
  • additional disclosure requirements regarding the use of offsets in achieving GHG emissions targets
  • removal of the requirement for a separate GHG emissions inventory report
  • an exemption from reporting on scope 3 GHG emissions for the first year
  • one year exemptions for reporting on current financial impacts, disclosing anticipated financial impacts and disclosing transition plan aspects of strategy
  • a staggered introduction of comparative information requirements over the first few reporting years under CS 3, and
  • an updated materiality section (in response to extensive feedback).

From here

The timetable from here involves both XRB and the Financial Markets Authority (FMA).

August:

  • XRB hosts deep dive webinars covering particular aspects of the proposed system.
  • FMA writes to each of the entities it considers will be required to report.

September/October:

  • FMA publishes advice on its expectations of entities’ record-keeping.

December:

  • XRB releases the finalised climate standard and guidance in December.

If you have any questions, or would like assistance with a submission, please get in touch.

We are reviewing these documents in detail and will publish a further note.

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