The Standards will be developed with engagement with a broad range of stakeholders (including entities that will be subject to the regime and investors who will benefit from it) as well as with Māori to apply a te ao Māori world view to the Standards. An amendment to legislation is also due to take place this year in order to extend the XRB’s mandate to undertake this work.
The XRB also confirms that the new Standard will build on and align with the recommendations of the Task Force on climate-related financial disclosures (TCFD) while taking account of international developments, noting that while New Zealand initially lead on mandatory disclosures, other governments such as the United Kingdom have caught up and are working on a similar schedule to New Zealand.
We welcome the XRB’s update on the development of the Standards. With climate-related disclosures potentially required for the financial year ending 2023 at the earliest, reporting entities should be prepared for this at the start of 2022.
Future-focused entities and its respective boards and leadership teams should already be undertaking a systematic review of climate change implications on their businesses and embedding climate issues into structures and decision-making and improving navigation of the risks and opportunities.
To assist with this, we recommend that reporting entities take a look at the various TCFD guidance and international developments that the XRB has linked on its website here.
If you have any questions in relation to the proposed climate-related financial disclosure regime or are considering how these changes will affect your business, please contact one of our experts.