Submission on the climate-related financial disclosures regime

LCANZI has submitted to the Economic Development, Science and Innovation Select Committee on the Bill that will implement the climate-related disclosures regime:

The regime has been touted by government as a policy that makes New Zealand a world leader in climate action. However, in its current form the regime does not meet the government’s goal of “ambitious climate action” (see: New Zealand Government press release from the office of Rt Hon Jacinda Ardern, “Leaders’ Summit on Climate to raise ambition on climate action”, 23 April 2021).

In its current form, the regime:

  • Excludes government agencies from disclosure obligations – this is a fundamental failure of the government to lead by example;

  • Excludes non-listed entities from disclosure obligations – this creates a distortionary and inequitable approach where their listed competitors must comply with the regime;

  • Does not allow for future expansion – while it is desirable for the regime to have a smaller scope while climate reporting standards and expertise are first established, the regime must be able to later expand its scope;

  • Sets up some businesses to fail – some climate data and modelling requires technical expertise that some climate reporting entities simply will not have. Government agencies, like NIWA or MfE, should be required to publish centralised data and modelling to avoid duplication of this work by every climate reporting entity. This will also ensure consistency and comparability of climate statements;

  • Does not address “double materiality” – the proposed regime focusses on the material impact of climate change on entities, but not on an entity’s material impact on climate change.

We have called on the Select Committee to fix these issues before passing the Bill to ensure that the regime lives up to the “world-leading” label that the government has given it. LCANZI’s submission addresses how these issues could be fixed. LCANZI has asked for the opportunity to appear in person before the Select Committee to address its submission.

LCANZI