Fund managers and other climate-reporting entities will get an extra year to finalise emissions assurance programs among other compliance delays under proposed amendments published by the External Reporting Board (XRB) last week.
Licensed investment managers (with $1 billion plus under management) along with most NZX-listed companies, insurers and banks were due to supply third-party-audited carbon exposure data in the second batch of annual climate reports due next year.
But following strong industry feedback, the XRB has pushed out the assurance deadline to “accounting periods ending on or after 31 December 2025”. Most NZ fund managers report to the financial year ending March 31.
In the consultation document, the XRB says while the first climate-reporting period had been a “success”, the regulatory body “has heard from several sources that many CREs are facing challenges with obtaining reliable data, high costs, and how to disclose in the absence of comprehensive guidance on certain topics”.
“There are also concerns about obtaining assurance over scope 3 greenhouse gas (GHG) emission disclosures because of difficulties in obtaining sufficient reliable data from up and downstream entities.”
Despite offering another 12 months to comply, the XRB proposals fall short of a request from the Boutique Investment Group (BIG) to at least align fund manager climate report carbon emissions assurance duties with the just-introduced Australian regime where the obligation starts from July 2026.
“… we ask that this requirement be deferred, at a minimum, until one year post the period that Australian fund managers are required to obtain assurance, if not indefinitely,” BIG said in a letter to government.
However, the XRB proposes other relief with further one-year extensions for climate-related disclosures of ‘anticipated financial impact’ and ‘transition planning’: current rules already allow entities a one-year exemption from reporting on these categories.
NZ was the first country in the world to introduce mandatory climate-reporting for certain specified businesses and fund managers but others including the UK, US and Australia are fast-following.
“All new reporting topics come with learning curves; however, it is clear that the complexity of climate change has made this particular curve especially steep,” the XRB says.
The consultation document also notes a number of new international climate standards, practices and datasets have been published since the NZ regulations came into force last year.
Submissions are due by October 30 in a tight timeframe constrained by the need to have any amendments finalised by December this year.
Separately, the XRB will review the climate-reporting regime next year with further amendments possible. The NZ accounting standards-setting body also plans to release guidance on emissions assurance, anticipated financial impacts and transition planning in 2025.
Wendy Venter is due to replace incumbent XRB chief, April Mackenzie, in January next year. Venter serves as an independent director on several government and charitable bodies including on the XRB audit and assurance board (from 2022).
NZ isn’t the only jurisdiction back-sliding on tough sustainability rules with the European Union also floating a delay to new ‘deforestation’ regulations.
Under the law, companies would have to ensure products sold in or exported from the EU would not contribute to global deforestation – requiring clear oversight and reporting of supply chain exposures.
Kick-back from both European states and industry organisations as well as forestry producer nations, however, forced a regulatory rethink.
Large companies were initially due to comply by the end of next year with “micro- and small” firms to join the regime in June 2026: the proposed amendment extends the deadline for both entities by one year.
The 12-month delay would allow the market “additional time to phase in the system is a balanced solution to support operators around the world in securing a smooth implementation from the start”, the EU says.