PwC says companies are getting better at recognising the risk climate change poses to their businesses.
PwC says companies are getting better at recognising the risk climate change poses to their businesses.
New Zealand companies are getting better at recognising the risks climate change poses to their businesses, PwC says.
The consultant’s latest analysis continues its investigation into NZX50 companies as they prepare for the adoption of theAotearoa New Zealand Climate Standards (NZCS) next year.
In its previous reviews, the numberof entities discussing climate-related risks and impacts in their financial statements has varied from one reporting season to the next, PwC said.
Although some entities were starting to provide better-quality, more entity-specific considerations compared to previous disclosures, overall, the disclosures continued to be brief.
“In line with the expectations of the Financial Markets Authority on the impact of climate risks in financial reporting, we hope to see a significant increase in the number of entities discussing climate-related risks and impacts in their financial statements,” PwC said.
PwC’s review of June-September reporting stocks follows its earlier analysis of March, June andDecember 2022 and March 2023 reporting companies.
Of the 30 reporting companies this time around, 15 discussed the impact of climate-related risks in their financial statements and 29 published climate-related disclosures outside the financial statements.
Karen Shires, chief risk and reputation officer at PwC.
Eight companies voluntarily “early adopted” or reported “in line with” or “with reference to” the NZCS.
“We are starting to see an increase in climate risk consideration being given in financial statements, which is good to see,” PwC chief risk officer Karen Shires told the Herald.
“One of the key things that we have seen in this grouping of reporters is eight of them voluntarily included reporting in line with the new Aotearoa New Zealand Climate Standards, so that’s a big step forward,” she said.
“Those are people who have gone early and have started what the new climate standards will need them to do,” she added.
“Just as boards are very focused on ensuring their financial statements are fair, they are also concerned with things like gender pay gap reporting.”
Shires said climate risk reporting and broader sustainability issues were now being built into the key performance indicators (KPIs) for many chief executives of the NZX50 listed companies.
“Seven of the 15 had climate and sustainability linked to KPIs for their CEOs and key management, so that’s quite a change,” she said.
PwC, in its report, said 14 businesses discussed recent extreme weather events and four had quantified the impact of them.
In its annual report, Freightways, identified the potential of extreme weather events and sea level rise to cause prolonged or sustained disruption to the transport network as a significant physical climate-related risk in its climate-related disclosures.
