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Starting in 2025, around 200 major organisations in New Zealand such as public companies, banks, and insurers will be required to disclose their climate transition plans for adapting to a climate-resilient future. The Government’s External Reporting Board (XRB) has also announced that it is considering an extension to the deadline for submitting these plans, along with other related requirements.
These organisations will need to outline their strategies for managing climate-related financial risks, such as disruptions to supply chains or damage to infrastructure. The disclosures must be submitted to the XRB’s website, following global frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) and International Financial Reporting Standards (IFRS) S2.
The goal is to ensure transparency and help businesses and investors assess the financial impacts of climate change.
Global Recognition and Adoption of Similar Standards
New Zealand’s mandate for carbon disclosures aims to improve transparency on how businesses assess and manage climate-related risks. Organisations must report on their greenhouse gas emissions, climate governance, and risk mitigation strategies. This regulatory framework has not only provided clarity but also inspired other countries to consider similar measures to bring more consistency to global climate risk reporting.
Aotearoa has become a pioneer in carbon disclosure, influencing a global movement toward clearer climate risk reporting.
Countries across Europe, the U.S., Australia, and Canada are either implementing or considering similar disclosure requirements, acknowledging the financial impacts of climate risks. New Zealand’s framework, which aligns with international standards such as TCFD and IFRS, has helped establish best practices for global climate reporting.
Contact Energy became the first electricity provider in New Zealand to establish emission reduction goals in accordance with the Science Based Targets initiative (SBTi) and TCFD guidelines. This level of transparency enabled the company to secure a multi-million-dollar green bond and positioned it advantageously with investors prioritising sustainable energy.
The Growing Trend Toward Mandatory Carbon Disclosures
The trend toward mandatory carbon disclosures is gaining traction as investors and governments seek to understand the financial risks posed by climate change. New Zealand’s framework, which aligns with global sustainability efforts, facilitates better alignment between corporate practices and climate goals, helping steer investment towards a low-emissions economy.