Government tightens scope of climate reporting

The New Zealand Government has confirmed a significant narrowing of the scope of the climate-related disclosures regime. This follows public consultation earlier in 2025 on proposed changes to climate reporting.

 

Key changes

The key changes include:

• Raising the mandatory climate reporting threshold for listed issuers (debt or equity) from NZD60 million to NZD1 billion.
• Removing managed investment schemes (MIS) from the climate reporting regime entirely.
• Adjusting director and company liability settings, particularly removing deemed liability for certain breaches for all reporting entities.

 

Changes to reporting thresholds

The Government has confirmed an increase to the reporting threshold for listed climate reporting entities (CREs):

• Current threshold:
• Equity issuers: market capitalisation of NZD60 million.
• Debt issuers: total face value of quoted debt of NZD60 million.
• New threshold (effective from 31 March 2026):
• Both equity and debt issuers: NZD1 billion.

From 31 March 2026, listed issuers will only be subject to mandatory climate-related disclosures if their market capitalisation (for equity) or principal amount (for debt) exceeded NZD1 billion in each of the two preceding reporting periods, and they remain listed in the current period.

Companies now below the new threshold may continue to report voluntarily if they wish.

 

Managed investment schemes

The Government has also confirmed that MIS managers will no longer be subject to mandatory climate-related disclosure obligations. This change affects 22 MIS managers collectively managing approximately NZD230 billion in funds.

• Current threshold:
• MIS managers with more than NZD1 billion in total assets under management are required to produce annual climate statements.
• New threshold:
• MIS managers will no longer be required to prepare annual climate statements.

As a result of these changes, the total number of reporting entities will reduce by about half, from 164 to 76, with 66 listed companies and 22 MIS managers removed from the regime.

 

Changes to liability settings

The Government has also confirmed amendments to the liability framework for climate-related disclosures:

• Removal of deemed liability: directors will no longer be personally liable if their company breaches climate reporting obligations.
• Reduced evidentiary standard: directors and reporting entities will not be required to meet the same level of evidentiary support for climate disclosures as they do for financial reporting. This reflects the forward-looking and inherently uncertain nature of climate-related information, compared to the historical basis of financial reporting.
• Ongoing liability for misleading conduct: directors and companies remain accountable for any misleading or deceptive conduct, or false or misleading statements in climate disclosures.

CREs should note that the fair dealing provisions under Part 2 of the Financial Markets Conduct Act 2013 (FMC Act) remain in force. This includes section 19, which prohibits misleading or deceptive conduct in climate-related disclosures, including by omission.

Importantly, while deemed liability for directors is being removed, CREs are still required to comply with the Climate Standards made by the External Reporting Board (XRB).

 

Next steps

The Government has confirmed that changes to climate-related disclosure requirements will be introduced through the Financial Markets Conduct Amendment Bill in 2026.

In the meantime, the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – announced on 28 October 2025 its decision to provide interim relief in the form of taking a ‘no action’ approach to affected entities who are expecting their climate reporting obligations to cease once legislation is passed.

The ‘no action’ approach means the FMA will not take any action in respect of a failure by CREs with upcoming lodgement dates for the 2025/2026 reporting period to prepare or lodge climate statements, or any other obligation under Part 7A of the FMC Act.

This ‘no action’ approach will commence on 1 November 2025. CREs with 30 June 2025 balance dates are still required to lodge their climate statements by 31 October 2025, as their preparations for lodgement will have been well underway when the Government’s decisions were announced on 22 October 2025.

With the Government’s position now clarified, the XRB is in a position to decide whether to extend the current adoption relief provisions for anticipated financial impacts and Scope 3 emissions reporting.

If granted, the extension would provide CREs entering their third reporting period and preparing for their first financial impact reports with valuable breathing room to strengthen reporting practices. It would also allow more time to refine methodologies, easing the compliance burden associated with complex and uncertain data, and enabling CREs to produce more credible disclosures overall.