New Zealand’s government has announced a major reset of its Climate-Related Disclosures (CRD) regime, aiming to strike a new balance between transparency, compliance cost, and business competitiveness. Commerce and Consumer Affairs Minister Scott Simpson confirmed that the reforms are designed to “support business growth and New Zealand’s capital markets” after a year of feedback from listed companies and investors.

What’s Changing

While formal amending legislation has yet to be introduced, the proposed adjustments will significantly narrow the scope of entities required to report under the CRD framework. Key measures include:

• Raising the reporting threshold for listed issuers from NZ$60 million to NZ$1 billion in market capitalization or debt face value — cutting the number of climate reporters by roughly half.

• Removing managed investment schemes (MIS) from the climate reporting regime entirely.

• Easing director liability provisions, eliminating personal liability for directors if their company breaches CRD requirements. However, both directors and companies will remain accountable for false or misleading statements.

• Reducing evidentiary requirements for climate disclosures compared to financial disclosures, recognizing that climate-related information is inherently forward-looking and uncertain.

These reforms respond to mounting concerns that mandatory reporting has become too costly and complex, with some firms spending up to NZ$2 million on compliance. Minister Simpson noted that the burden may be deterring listings on the NZX, where only 34 companies have listed since 2020 compared with 37 delistings.

Why It Matters

The move reflects a growing debate between ambition and practicality in sustainability regulation. New Zealand was the first country globally to mandate climate disclosures in 2021, setting an early precedent for transparency aligned with the Task Force on Climate-related Financial Disclosures (TCFD). However, the government now acknowledges that the framework, as designed, risks undermining its own capital markets.

The Financial Services Council has described the reforms as a “pragmatic recalibration” — one that keeps transparency intact while reducing compliance burdens and uncertainty for directors.

Timing and Implementation

The government expects to introduce legislation in 2026 to formalize the new rules. What remains unclear is whether transitional measures will be announced before companies with 31 December or 31 March year-ends need to file their next statements.

Regional Context

The reforms arrive as Australia rolls out its own mandatory climate reporting regime under AASB S2 Climate-related Disclosures, modeled closely on the ISSB standards. While Australia doubles down on disclosure requirements — particularly for large listed entities and superannuation funds — New Zealand’s recalibration marks a contrasting approach, prioritizing market participation and proportionality.

The Takeaway

New Zealand’s recalibration underscores an emerging global tension: how to maintain credible, investor-useful climate reporting without stifling market activity. For businesses still within scope, the emphasis will now shift from compliance intensity to disclosure quality. For others, this signals a more flexible path forward — one that may influence how other small and mid-sized markets approach sustainability reporting in the coming years.