Climate regulation

Climate considerations are increasingly embedded in New Zealand's policy, capital markets and business decision-making. For investors and organisations operating in New Zealand,the key elements of the domestic framework are:

• A split-gas emissions target. Emissions of greenhouse gases other than biogenic methane must reach net zero or lower by 2050. Biogenic methane emissions must be at least 10% below 2017 levels by 2030 and between 14% and 24% below 2017 levels by 2050.¹
• The New Zealand Emissions Trading Scheme (NZ ETS). The NZ ETS is New Zealand's principal emissions-pricing mechanism. Changes to unit supply, price controls and sector settings can affect businesses’ operating costs, asset values and investment decisions.
• The second Emissions Reduction Plan (ERP2). Amended in January 2026, ERP2 covers 2026-30 and sets out the Government's plan for meeting the second emissions budget while seeking to support economic growth and energy security.²
• Mandatory climate reporting. New Zealand passed world-first legislation in 2021 requiring certain large financial market participants to report on climate-related risks and opportunities. The External Reporting Board (XRB) issued the Aotearoa New Zealand Climate Standards (NZ CS) in December 2022, and the first mandatory climate statements were lodged in 2024.

Together, these measures influence the cost of carbon, access to capital, disclosure expectations and the resilience of investments in New Zealand.

As seen globally, the expectation for companies to share more about how their businesses are affected by climate is increasing amongst investors and stakeholders alike. In fact, PwC’s Global Investor Survey identified that 78% of investors believe that providing this information has a very or moderately positive impact on investor engagement.³ In this section, we focus more closely on the climate reporting requirements in New Zealand and what investors and those wanting to do business with NZ can learn from the NZ reporting regime. 

The NZ CS are principles-based standards focused on climate-related matters. They require disclosure of material climate risks and opportunities, how these are governed and managed, and metrics and targets relevant to the business, including greenhouse gas emissions.

Climate reporting entities must prepare annual climate statements and lodge them on the public Climate-related Disclosures Register. Adoption Provisions provide transition relief for certain requirements, including anticipated financial impacts, scope 3 emissions, comparative information and scope 3 assurance.

Stop, delay or consolidate? A moment to take stock for climate reporting regulation

Although New Zealand was an early mover on mandatory climate reporting, it has continued to refine the regime through consultation with preparers, users and market participants. The Financial Markets Conduct Amendment Bill proposed changes intend to better balance compliance costs with the value of reporting in New Zealand's relatively small capital market.
If enacted, these changes would:

• raise the listed issuer threshold from NZ$60 million to NZ$1 billion for both quoted equity and quoted debt;
• remove managers of registered investment schemes from the mandatory regime;
• amend the liability settings, including removing deemed director liability for an entity’s breach and providing limited protection in relation to unsubstantiated representations where the applicable climate standards have been complied with;
• remove insurers whose business is wholly or predominantly health or life insurance.

These amendments have not yet been enacted. However, reporters can immediately benefit from these changes as the Financial Markets Authority (FMA) has extended its "no action" relief for affected climate reporting entities in respect of specified reporting periods. Entities required to make climate-related disclosures are set out under Part 7A of the Financial Markets Conduct Act 2013.⁴

We assessed 66 climate statements from 2024-2025⁶ and identified common climate-related risks emerging from New Zealand climate disclosures as set out below, alongside the opportunities that reporters are identifying as being material to their business:

As an export-driven economy, New Zealand has a strong interest in aligning its reporting environment with key trading partners to make it easier to do business across borders.

One proposal that will help achieve that is set out in the 2026 climate-reporting roadmap.⁹ In this roadmap the XRB has proposed transitioning NZ reporting to an IFRS S2-equivalent climate disclosure standard, supporting greater alignment with Australia and other jurisdictions adopting IFRS S2. The proposed roadmap aims to improve comparability and reduce duplication for cross-border groups, with early adoption from 1 October 2026 and mandatory application from 1 January 2033. At the time of publication, these proposals remain subject to finalization.

What does this mean for those looking to invest or do business in New Zealand?

No-regrets actions:

• Assess reporting obligations early. New Zealand subsidiaries, branches or listed issuers may have obligations separate from their offshore parent
• Check for trans-Tasman relief. Certain Australian entities may be able to rely on an exemption where they report under AASB S2 or an approved equivalent ¹⁰
• Make climate reporting part of your due diligence. Climate-related information can provide insight into governance, climate risks and opportunities that affect business risk, valuation and prospects
• Prepare for value-chain reporting requests. Businesses outside the mandatory regime may still need to provide emissions and climate-risk information to offshore customers, lenders or parent entities

Understanding how climate impacts New Zealand is essential to doing business here. As New Zealand's climate reporting regime evolves, investors and businesses who act early and use these reporting insights to gain transparency on a company’s financial effects and resilience to climate, will be better placed to protect business value and capture opportunity.