XRB may change NZ’s climate reporting standards

The XRB is looking at changing some climate change reporting standards required of big public and private entitites.

The External Reporting Board (XRB) - an independent Crown entity responsible for establishing New Zealand’s financial reporting strategy - has said it will look at adjusting the country’s climate reporting standards.

The board said it will publish a consultation document exploring options for transitional adjustments to the standards, which are aimed at supporting the allocation of capital towards activities consistent with a transition to a low-emissions, climate-resilient future.

Chief executive April Mackenzie said the move was in response to feedback from climate reporting entities (CREs) - a range of public and private-sector organisations.

“With the first wave of climate statements now published by many entities, we’re pleased with the overall level of effort made to meet the objectives of the climate standards,” Mackenzie said.

“Ultimately, a balance must be found between supporting entities to disclose, while systems, processes and data quality improve over time,” Mackenzie said.

The XRB is developing options for transitional adjustments to the regime.

This includes looking at what possible arrangements might be put in place to ease certain disclosure and assurance requirements to allow time for improvements in data availability and quality.

A formal consultation document outlining options will be published with a limited period for feedback so that any possible changes can be implemented by the end of the year.

Early this month, PwC said more NZX-listed companies were starting to discuss the impact of climate change in their financial reports.

The consultancy looked into NZX 50 March 2024 reporting stocks - the second wave to mandatorily prepare climate-related disclosures (CRD) in compliance with standards the XRB issued after they became effective in January 2023.

“We are starting to see a bit more discussion about climate impact in the financials,” PwC chair-elect and chief risk and reputation officer Karen Shires said at the time.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.