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Details
- New Zealand
Deep dive
Background
In 2021, New Zealand became one of the first countries to mandate climate-related disclosures (CRD) for large financial entities through the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act. This regime, embedded in Part 7A of the Financial Markets Conduct Act 2013 and supported by the Financial Reporting Act 2013, requires certain Climate Reporting Entities (CREs) to publish annual climate statements aligned with standards set by the External Reporting Board (XRB). The Financial Markets Authority (FMA) oversees compliance, while the Ministry of Business, Innovation and Employment (MBIE) administers the framework. The CRD regime builds on New Zealand’s broader climate goals, including its Zero Carbon Act 2019 and emissions reduction targets, by addressing financial market transparency and aligning capital flows with a low-emissions future.
Reporting Requirements
Under the CRD regime, CREs must disclose climate-related risks, opportunities, and annual greenhouse gas (GHG) emissions—categorized as Scope 1, 2, and 3—in line with the Aotearoa New Zealand Climate Standards (NZ CS 1–3). Reports must include governance, strategy, risk management, and metrics/targets, with independent assurance required for GHG emissions data starting in 2024. Climate statements must be filed within four months of the entity’s balance date and published on the public Climate-related Disclosures Register (CRD Register). The standards are principles-based, allowing flexibility in presentation but requiring materiality assessments and transparency about estimation uncertainties. Notably, Scope 3 emissions reporting was deferred for the first year to ease implementation.
Affected Entities
New Zealand's CRD regulations target large financial institutions and listed companies. This includes:
Financial institutions such as registered banks, credit unions, and building societies with total assets over $1 billion.
Managers of registered investment schemes (excluding restricted schemes) managing more than $1 billion in assets.
Licensed insurers with over $1 billion in assets or more than $250 million in annual gross premium revenue.
Large listed issuers of quoted equity or debt securities, where “large” means equity issuers with a market value above $60 million or debt issuers with quoted debt exceeding $60 million in face value. Issuers listed on growth markets are excluded.
Managers of registered investment schemes must disclose information on a fund-by-fund basis to help investors assess how climate change may affect future performance. Overseas-incorporated organizations will also be required to disclose if their New Zealand operations exceed the relevant thresholds. These thresholds will be periodically adjusted in line with the consumers price index.
The FMA has provided resources to facilitate compliance with the regulations. As of 1 May 2025, 260 companies had submitted climate statements for 2024 financial year on the CRD register.
Penalties for Noncompliance
Noncompliance carries serious consequences. The FMA may issue warning letters, impose penalties, or pursue court action for false/misleading statements or failure to report. Directors face specific obligations, including signing off on climate statements and ensuring GHG data assurance. While the FMA adopts an educative approach in early years, it will escalate enforcement as the regime matures, including proactive audits of underlying records. Greenwashing risks are mitigated by fair-presentation rules and alignment with the FMC Act’s fair-dealing provisions, which prohibit misleading claims about climate performance. By combining disclosure mandates with robust oversight, New Zealand’s CRD regime sets a high bar for corporate climate accountability.
