Navigating Aotearoa New Zealand Climate Standards
New Zealand was the first country in the world to introduce legislation to make climate related disclosures mandatory and these standards are now live.
This means that from the end of 2023, climate change ambition must include clear disclosure as investors, stakeholders, and regulators will look to understand how organisations are addressing climate related risk.
Aon, in partnership with RiskNZ, hosted a Rising to the Challenge of Climate Related Disclosures Forum series, bringing together an esteemed panel from Aon, RiskNZ, MinterEllisonRuddWatts, the External Reporting Board (XRB), to share their insights and expertise on climate related disclosure requirements.
These forums provided the support needed to give those that attended clarity to get ahead in their response, ensuring that they are better informed and better advised to make better decisions.
Below is a summary of key takeaways:
The Climate Related Disclosure Standards are live. There are three Aotearoa New Zealand Climate Standards, NZ CS 1, CS 2, and CS 3. They need to be read in tandem and as a package. More detail can be found here: https://www.xrb.govt.nz/standards/climate-related-disclosures/aotearoa-new-zealand-climate-standards/.
Work needs to be underway from the start of the reporting period. Some of these will take time, e.g., record keeping, governance and scenario-based risk/opportunity analysis.
Climate disclosures are a journey. You will not get it 100% right the first time, but this shouldn’t stop you starting your journey. Build on them year-on-year and don’t give up. Your company will get more benefits if this is undertaken beyond just being a compliance exercise.
Test your climate scenario analysis against your business strategy and model. Expect these to change - if they don’t, it is suggested that you may need to undertake them again.
Take account of greenwashing risks too. This applies to everyone, even if you are not yet caught under the mandatory climate related disclosure regime.
Aon Risk Management Services
Aon offers holistic risk management services to help clients identify, assess and manage existing and emerging risks. We add distinctive, long-term value to optimise your overall insurance programme and enhance your risk management.
If you would like to discuss any of the points covered above, please contact
Practice Lead - ESG, Climate and Enterprise Risk
Dr Mostafa Nayyerloo
Principal Risk Consultant