NZX-listed companies are warming to the need to report the impact of climate change in their annual accounts, PwC says.
The consultancy's chief risk and reputation officer Karen Shires said more local corporates were coming to the party, but progress was slow.
PwC's analysis of 21 NZX-listed companies with June 30 balance dates showed far more coverage of climate change matters in relation to green bonds, where they were linked to achieving certain sustainable targets.
"We are starting to see a gradual change, certainly in the front half of annual reports, where there is a lot more coverage," Shires told the Herald.
"Although there was only a small number who had any coverage of it in their actual financial statements those that did - three of them (Meridian, Genesis and Freightways) - were far more considered," she said.
PwCs report examined both how climate-related impacts on the financial statements were disclosed and how auditors considered climate-related impacts in key audit matters (KAMs).
It comes at a time of increasing interest from investors and regulators in how companies handle Environmental, Social, and Governance (ESG) factors and how the impacts are reflected in financial statements.
Of the 21 businesses covered, 19 reporters included non-financial climate-related information outside of the financial statements.
Six businesses noted the use of "green" finance.
Earlier this year, the Government passed legislation to mandate climate-related disclosures for publicly listed companies and large entities.
The new reporting standards are currently being developed in line with the TCFD (Taskforce on Climate-Rated Disclosures) framework, which will require organisations to assess the risks and opportunities of climate change.
The disclosures are expected to be required for the financial years starting in 2023.
"As large NZX listed companies are going to have to comply with the external reporting board's new climate-related disclosure standards starting next year, we expect that the thinking of these entities will mature as they prepare to report under those standards," PwC's report said.
"And in line with that, we expect to see more discussion about how climate-related risks and opportunities impact the financial statements of these businesses."
PwC said climate-related risks can have a broad impact on financial statements.
Depending on the business' supply chain, customer base and physical location, there are many ways financial statements could be affected.
"We just have to look at the recent extreme weather events in the West Coast, Canterbury and Napier to see the physical risks that the changing climate poses.
"However, we are still learning about how climate change might impact our sea levels, climate and weather," it said.
"So, it is likely that the quantification of the potential impact of these physical risks in most entities' financial statements will continue to evolve as entities develop a better understanding of these risks," the report said.