Press release: LCANZI calls government to better fund FMA's climate role

On 5 November 2021, Lawyers for Climate Action New Zealand Inc (LCANZI) made its submission to the Ministry of Business Innovation and Employment (MBIE) in response to MBIE’s consultation on funding options for the Financial Markets Authority (FMA) in relation to its responsibilities under the new climate-related disclosures (CRD) regime. 

LCANZI rejected both of the two potential funding options proposed by MBIE for the CRD role and called for Crown funding at least equivalent to that being proposed for the Financial Markets Conduct of Institutions regime under the same consultation.

Jenny Cooper QC said “ We support MBIE’s proposal of additional funding of the FMA. However, neither of the propositions in the Discussion Document provide sufficient funding for the FMA to carry out its role under the CRD Regime properly. More Crown resources are needed to effectively monitor and guide companies through the transition. It is particularly important the funding comes from the Crown given the high amount of public good benefit which will follow. “

LCANZI submitted the funding proposed in the consultation for the FMA is insufficient and too late because it will not allow the FMA to:

  • Monitor companies on reporting misleading information, including general check and balances.

  • Provide sufficient guidance to reporting entities in the first few reporting periods of the CRD regime.

  • Employ and develop a team skilled with the expertise needed to navigate through the first few years of mandatory reporting.

The submission concludes that funding should be at least equivalent and as early as is proposed in the Financial Markets Conduct of Institutions Bill, which will come into force well after the CRD regime.

The FMA will be responsible for monitoring and enforcing the new the CRD regime, recently introduced into the Financial Markets Conduct Act, the Financial Reporting Act and the Public Finance Act.  More information on FMA’s role can be found here.

Jenny Cooper QC is President of LCANZI. The members of LCANZI's Climate Related Disclosures Sub-committee  are Lloyd Kavanagh, Teddy Rose, Sophie Meares, Isabelle Smith, Georgie Crawford, and Michelle Tustin.

LCANZI