Today, the Government has announced major changes to New Zealand's climate-related disclosures regime.
In this update, we answer some of the key questions we expect to be in the minds of entities that may be impacted by the changes.
What are the proposed changes?
The proposed changes include:
- raising the threshold for listed issuers from $60 million to $1 billion1;
- removing managers of registered managed investment schemes from the regime entirely; and
- relieving directors of automatic personal liability for non-compliant disclosures.
How many entities are impacted by the proposed changes?
MBIE estimates that the proposed changes will reduce the number of reporting entities by about half, from approximately 164 to 76, with 66 listed issuers and 22 fund managers removed from the regime.
There are no changes proposed to the reporting thresholds for registered banks and licensed insurers, although all reporting entities are impacted by the changes to director liability settings (explained further below).
Will I have to prepare climate statements in 2026?
It depends.
The Government is proposing to make these changes as part of the Financial Markets Conduct Amendment Bill, which is currently in the Select Committee process and is due to report back to Parliament on 30 January 2026. Legislation will be passed thereafter, and we understand the Government is hoping the revised legislation will be in place by March 2026.
Listed issuers that meet the new $1 billion thresholds, as well as large banks and insurers, will still need to prepare climate statements in 2026.
Can I continue to report even if my business will be removed from the regime?
Yes – entities can still choose to report voluntarily. Many listed issuers were preparing some form of voluntary climate-related disclosures prior to the climate-related disclosures regime coming into effect and/or have already done substantial groundwork under the mandatory regime for two years, so may choose to still do so to meet stakeholder expectations.
Voluntary disclosures will remain subject to general consumer prohibitions on false and misleading statements and may also be subject to the "fair dealing" provisions in the Financial Markets Conduct Act 2013. Accordingly, it remains important that statements in voluntary climate-related disclosures regimes are accurate and able to be substantiated. In addition, care should be taken if describing voluntary disclosures as compliant with or based on the Aotearoa New Zealand Climate Standards.
What do the proposed changes to director liability settings involve?
Under the current legislation, directors have automatic liability for contraventions of the climate-related disclosures framework, subject to the availability of defences.
The proposals announced today would ease those settings by removing automatic director liability for non-compliant disclosures.
The Government's announcement also suggests that directors and reporting entities will not have to show the same level of evidence for climate-related disclosures as they do for financial disclosures, recognising that climate reporting involves future-focused and uncertain information. The exact way in which that proposal will be implemented in the legislation remains to be seen.
As noted, liability will continue to apply to false or misleading statements in both voluntary and mandatory climate statements. The approximately 76 entities that will still be required to report will also remain liable for non-compliant disclosures, and accordingly it remains important to have appropriate processes in place to support compliance.
What changes can I expect in 2026 if I am one of the approximately 76 entities still captured?
For those entities that will remain within scope of the regime, we note that:
- The XRB has recently consulted on whether adoption relief for certain disclosure requirements (anticipated financial impacts, scope 3 emissions and scope 3 assurance) should be extended for an additional two years, and decisions are awaited. If those extensions are granted, there will be no new areas of disclosure required in 2026.
- In addition, the XRB has recently closed consultation on a request for information in relation to potential alignment of New Zealand's climate standards with international equivalents. While no decisions have been made, we expect that international alignment will remain a key focus for the market and the XRB in 2026.
If you would like to discuss the implications of the proposed changes for your business, get in touch with one of our experts or your usual Russell McVeagh contact.