Stay the course: Slashing climate reporting requirements is a backwards step

Mindful Money is calling on the government to reconsider their announcement that they will severely cut back on climate reporting obligations by companies and managed investment funds. The result of these changes that the government is intending to bring in from 2027 would be less information for investors, key stakeholders and the public, and less accountability for climate emissions.

Barry Coates, Founder and co-CEO of Mindful Money commented: “Climate risks and opportunities are real and important. They affect the financial performance and viability of companies as well as KiwiSaver and other investments. Providing this information supports company practices to manage their emissions and is necessary for sound financial decision-making.”

New Zealand companies and investment funds face growing financial risks from climate change. These are not only physicals risks to companies and their supply chains, but also transition risks, regulatory risks and reputational risks.

These risks have been recognised by governments and most of New Zealand’s trading partners and inward investors have requirements to report climate risks and opportunities. Climate reporting is underway in Australia, the EU, China, Canada, Brazil and US states such as California. Investors and companies doing business with New Zealand will require information on climate disclosures as part of their reporting obligations. They need a regulated system for those disclosures.”

Barry Coates: “These changes are out of step with the requirements facing our exporters, companies seeking to attract international capital and our New Zealand-based managed funds. If we want a strong economy, it needs to be properly regulated, not just a free-for-all without rules and reporting.”

“This is also yet another sign to international audiences that New Zealand is backing off its commitment to take action on climate change. It appears that we will only discover how valuable our international reputation is when we have lost it.”

In addition, climate information is important information for New Zealand investors. Mindful Money’s analysis shows that, while reporting for year one has provided only limited comparable information, there has been significant improvements in the integration of climate risk into corporate practices.

A survey of New Zealand’s institutional investors this year, undertaken by the Investor Group on Climate Chage (IGCC), the Centre for Sustainable Finance and Mindful Money, found there have been significant improvements in climate decision making, including emissions measurement, climate policy and board level governance.

Barry Coates: “By slashing reporting requirements, and removing them altogether for KiwiSaver and other managed funds, the government is turning its back on the investments that Climate Reporting Entities have already made into setting up the systems for reporting. The investments have been made. This is the time to reap the benefits, not to throw out the requirements.”

Contact:
Barry Coates
barry@mindfulmoney.nz
021 365 165

Notes for Editors:

A guide to countries with Climate Reporting Mandates https://trellis.net/article/your-guide-to-countries-with-corporate-climate-disclosure-mandates/