New Zealand’s largest listed companies are split over whether mandatory climate-related disclosures are delivering enough benefit to justify their rising price tag, with some reporting annual compliance costs as high as $1 million.
A BusinessDesk survey of 14 climate reporting entities shows companies spending between $100,000 and $1 million a year preparing climate reports over the past two financial years. Three companies agreed to be named. NZX said it spent $550,000 on its FY25 climate statement, Skellerup Holdings around $400,000, and Mainfreight $250,000.
Respondents said costs were driven by technical climate analysis, external assurance, legal review and significant internal staff time. Even companies that completed much of the work in-house reported paying specialist external advisers. While some executives accept the costs as part of improving disclosure quality, others questioned whether the compliance burden has grown out of proportion to the outcomes.
Several companies acknowledged the regime had sharpened their understanding of climate risk, lifted board-level focus and accelerated transition planning. Others said the disclosures largely formalised work already under way.
One respondent told BusinessDesk the reporting requirements had not materially improved internal climate capability, while another said resources were being diverted away from direct climate action to meet disclosure obligations.
NZX has been one of the regime’s most vocal critics, arguing the focus has shifted from climate outcomes to legal risk.
“With directors of Climate Reporting Entities (CREs) personally liable for a company’s emissions reporting – including criminal sanctions – this has tilted the purpose of the regime from driving climate action, capital allocation and addressing risk, to one too focused on compliance and mitigating risk to company board members,” said Simon Beattie, NZX’s general manager of corporate affairs and sustainability.
Mainfreight said the process delivered useful physical risk mapping and materiality analysis. “Some of which we have been able to repurpose into useful information for our customers, complying with the same or similar climate reporting,” sustainability manager Shaun Morrow said.
“Relative to the considerable work involved, we receive very little feedback on our reporting efforts.”
Opinions were also divided on the Government’s proposal to lift the mandatory reporting threshold from $60 million to $1 billion in market capitalisation. Supporters see relief for smaller companies, while critics warn it will reduce transparency.
Mainfreight cautioned: “Having so few companies left to compare will inevitably undermine that purpose.”