Why New Zealand companies should continue leading on climate performance reporting

MBIE’s decision to adjust the climate reporting regime by raising the reporting threshold for listed issuers from $60 million to $1 billion in market capitalisation or face-value of debt; removing managed investment scheme managers from the regime; and amending liability settings for directors and reporting entities, marks a significant shift in New Zealand’s regulatory landscape.

While the proposed changes are intended to reduce compliance burdens for many businesses, the degree to which the compliance threshold will be raised is higher than many had anticipated and will be above that of Australia’s and the European Union’s, substantially reducing the number of mandated reporting entities. This is particularly important given that New Zealand’s key export markets and largest international buyers are typically captured by climate and environmental disclosure mandates. Misaligned thresholds for reporting across jurisdictions could create confusion and more burden for New Zealand entities through differing expectations and requirements of buyers and export markets as they try to demonstrate transparency and accountability for managing climate-related risk.

New Zealand’s natural competitive advantage is anchored in its abundant natural resources; abundance of fresh water in particular, enables the export of water in the form of high-value dairy products. New Zealand accounts for approximately 30% of global dairy exports, with food and fibre accounting for roughly 80% of the country’s exports in recent years. This underscores a pivotal role for New Zealand in global food security, which means the way New Zealand tells its environmental story - and the credibility with which we present our management of climate-related risks and opportunities - has never been more important.

Regulatory change: raising the bar, not lowering the ambition

While the adjustments to New Zealand’s climate reporting regime may reduce the number of entities required to report, many believe the strategic and commercial benefits for climate disclosures remains. The cost of continued disclosure is unlikely to match that of the previous two years, given that the investment in establishing climate risk registers, transition plans, and internal capacity building has already been made. With international harmonisation, those that continue to report voluntarily will benefit from the investment made to date. As the regulatory net narrows, market-led voluntary disclosures may become even more critical in the context of the customers who purchase New Zealand’s goods and services.

According to the 2025 Deloitte CXO Sustainability Survey – which polled more than 2,100 executives across 27 countries – sustainability remains among the top three priorities for global business leaders, alongside technology adoption and artificial intelligence. The survey found that 83% of executives increased sustainability investments in the past year, with many reporting direct revenue benefits as a result. Notably, 45% of respondents identified climate change and sustainability as one of the top three business challenges for the coming year, and 70% expect climate change to significantly impact their strategy and operations within three years.

The survey also highlights that technology, particularly artificial intelligence, is now viewed as a critical enabler for advancing sustainability goals, with 81% of companies already using AI to support their efforts. These findings support the case for continued climate reporting: companies that invest in sustainability are not only meeting stakeholder expectations and regulatory requirements but are also positioning themselves for growth, innovation, and long-term resilience.

The business case for continued climate reporting

By focusing on value protection and value creation in a climate-changed world and a low-emissions economy, climate-related disclosure and planning defines a strategic pathway to resilience, high performance and competitive advantage, in the following ways:

1. Consideration of international climate regimes and investor confidence

Reporting entities may be required by other international frameworks to disclose actions being taken to manage climate risks. Specifically, dual listed entities, or tier 1 [under New Zealand accounting standards] suppliers to customers captured by other regimes, may need to provide evidence of resilience planning, emissions reduction, climate risk management and transition planning.

2. Access to credit and insurance, and risk-based pricing

Domestic and international banks, institutional investors and insurers leverage risk-based pricing to reduce the level of risk carried in their portfolios, as well as to achieve sustainable finance targets and manage their scope 3 (category 15) financed emissions. They will therefore likely favour entities that demonstrate proactive management of climate risk (both transition and physical). Entities that are actively managing climate risk exposure will also likely benefit from a stronger credit rating, continued access to credit, continued access to insurance, and potentially more stable premiums and interest rates.

3. Accountability and primary user considerations

Where climate events result in asset impairment, entities may be exposed to material misstatements if current or historical climate statements and underlying evidence are deficient – or absent. Such deficiencies in due diligence would likely be challenged by shareholders and investors and could potentially expose the entity to litigation.

4. Preparing for the future

The regulatory landscape is evolving rapidly, both in New Zealand and internationally. Voluntary reporters are better prepared for future requirements, including expanded assurance, broader ESG disclosures, and alignment with global standards. Early movers can shape the narrative, influence policy, and set the benchmark for their peers.

5. Legal considerations

Entities that have a strategy for managing climate risk exposure (both transition and physical risk exposure) are more likely to have processes and controls in place to manage risk. Where organisations are subject to media scrutiny or legal risk, those able to provide evidence of due consideration, planning, processes, and controls, will be better positioned to provide a robust defence, even where impacts may have been underestimated.

Conversely, reporting entities that have no governance processes to provide effective oversight of climate risk, no processes in place to manage climate risk, and no strategic plan to mitigate exposure to climate-related risk are likely to be challenged by investors, auditors, consumers and lobby groups. As evidenced by Deloitte’s sustainability survey, C-suite executives the world over continue to see value in managing climate-related risk, being able to disclose performance with confidence, and in transitioning their businesses for the future.

For more insights or tailored support on climate reporting, connect with Deloitte New Zealand’s Sustainability & Climate team.