The New Zealand government is easing mandatory climate reporting requirements in response to concerns about high compliance costs.
Companies listed on the NZX will now only have to provide climate-related disclosures if their market capitalisation exceeds NZ$1 billion, up from NZ$60 million, Commerce Minister Scott Simpson announced Wednesday in Wellington.
Directors will also no longer be held personally liable if their companies fail to comply. Simpson said the changes aim to ensure regulations remain “practical and proportionate,” acknowledging that while the policy’s intentions were good, its application had become burdensome.
“While the intentions were solid, the rules proved too onerous and have become a deterrent for potential listers,” he said. “It made sense to review these after the first year of reporting. We have listened to the feedback, examined how the regime operates in practice, and are now resetting the settings accordingly.”
Firms had raised concerns that compliance costs reached as high as NZ$2 million. NZX Ltd.’s General Manager of Corporate Affairs and Sustainability, Simon Beattie, said the original regime diverted funds from meaningful environmental action.
“This is money and effort that could be better spent on climate mitigation, transition and adaptation. Removing this liability will make a material difference,” he said.
Some environmental advocates argue the move weakens transparency. Barry Coates, co-chief executive of Mindful Money, said the change is “out of step with the requirements facing our exporters, companies seeking to attract international capital,” adding it signals New Zealand is “backing off its commitment to take action on climate change.”