XRB consultation on Climate-related Disclosure Standards Exposure drafts

IoD supports the XRB in their development of the climate-related disclosure standards. It is important that the regime enables effective, meaningful reporting that helps drive strategic thinking and change. The Strategy and Metrics and Targets sections of the standard will provide climate reporting entities (CRE’s) with a greater understanding of the implications of climate change on their organisations, and will also assist boards in the wider governance considerations relating to the strategy, purpose and risk management of their organisations. Chapter Zero New Zealand, hosted by IoD, supports directors and boards effectively govern and lead their organisations on climate-related matters.

IoD welcomes XRB’s exposure drafts reflecting that some entities can only initially disclose a limited understanding of the impacts of climate change and staging the implementation. While many CRE’s have already developed reporting frameworks, some are only just beginning. IoD supports the pragmatism in the exposure drafts, notably in relation to the disclosure of scope 3 emissions and the extent of assurance (using limited assurance).

While supporting the disclosure standards, IoD has commented on the importance of the XRB and Financial Markets Authority continue to consider the extent and nature of the disclosures to ensure the costs of the disclosures are consistent with the benefits delivered from them. The disclosures need to be seen in the context of other reporting requirements, notably financial reporting, as well as New Zealand Stock Exchange (NZX) reporting requirements for listed entities. This is particularly important when new reporting requirements are developed.