New Zealand introduced mandatory climate-related disclosures for large financial market participants, requiring annual climate statements prepared against standards issued by the External Reporting Board. The scope was tightened significantly in 2026.
Who is captured
Climate reporting entities are certain large financial market participants — large listed issuers, large registered banks, licensed insurers, credit unions, building societies and managers of certain investment schemes, subject to size thresholds.
Following Cabinet decisions in October 2025, the scope narrowed:
- Managed investment scheme managers were removed from the regime.
- The listed issuer threshold rose from $60 million to $1 billion. From 31 March 2026, listed issuers face mandatory obligations only if market capitalisation exceeded $1 billion in each of the two preceding reporting periods.
- Director liability settings were adjusted.
Legislation implementing the changes was intended to pass in 2026. Anyone near a threshold should confirm the current position directly rather than relying on earlier guidance.
What a climate statement contains
Statements are prepared against three XRB standards, with NZ CS 1 as the core disclosure standard. It is structured on four pillars:
- Governance — board oversight and management’s role in assessing and managing climate risks and opportunities.
- Strategy — the actual and anticipated impacts on the business model and strategy, including scenario analysis.
- Risk management — how climate risks are identified, assessed and managed, and how that integrates with overall risk management.
- Metrics and targets — including gross Scope 1, Scope 2 and Scope 3 greenhouse gas emissions.
Statements are lodged on the Climate-related Disclosures Register maintained by the Companies Office, and are publicly available.
Assurance
Independent assurance is required over greenhouse gas emissions disclosures. The assurance exemption for Scope 3 emissions has been extended to 31 December 2027, reflecting the practical difficulty of assuring value chain emissions.
Why this matters to businesses that are not captured
Most New Zealand businesses will never be climate reporting entities. A substantial number will nonetheless be asked for emissions data, because Scope 3 emissions are someone else’s Scope 1 and 2.
A reporting entity disclosing its value chain emissions needs data from its suppliers. That requirement flows down through supply chains regardless of whether the supplier has any regulatory obligation.
Banks assessing climate risk in lending, insurers assessing exposure, and large customers running procurement all ask. The practical consequence is that emissions measurement is becoming a condition of doing business with large counterparties, arriving commercially rather than through regulation.
Scenario analysis
The requirement most reporting entities find hardest. It involves considering how the business performs under different climate futures — including a scenario limiting warming to 1.5 degrees, a scenario with warming of 3 degrees or more, and a third of the entity’s choosing.
The value is less in the output than in the process, which forces boards to consider physical risk to assets and operations, transition risk from policy and market change, and where the business would be exposed.
Where to start if you are asked for emissions data
- Scope 1 — direct emissions from sources you own or control. Fuel burned in your vehicles and plant, and refrigerant losses.
- Scope 2 — indirect emissions from purchased electricity. In New Zealand this is comparatively low given the renewable share of generation.
- Scope 3 — everything else in your value chain, which is usually the largest and hardest.
Start with Scope 1 and 2, which are calculable from fuel and electricity invoices you already hold. Ministry for the Environment publishes emissions factors free, which is what converts litres and kilowatt hours into emissions.
Greenwashing risk
Whatever you disclose, the Fair Trading Act applies. Environmental claims must be substantiated at the time they are made, and vague claims like “sustainable” or “carbon neutral” without a defined basis are an area of active regulatory focus internationally and in New Zealand.
Claiming carbon neutrality based on offsets requires care about what the offsets actually are and whether the claim is misleading.
The XRB publishes the climate standards, the FMA publishes guidance for climate reporting entities, MBIE and the Ministry for the Environment publish regime material, and emissions factors are published under an open licence. All free.
General information only, not legal or accounting advice. Confirm current thresholds with the FMA.
