RBNZ backs proposals to strengthen climate-related disclosure

The central bank wants all entities to manage their own climate-related risks in a transparent manner

RBNZ backs proposals to strengthen climate-related disclosure

The Reserve Bank of New Zealand (RBNZ) has announced its strong support for External Reporting Board’s (XRB) plans to develop disclosure as a tool to understand and mitigate climate-related financial risks.

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XRB is the independent crown entity tasked with developing and implementing accounting, auditing, and assurance, and climate standards for New Zealand.

“We welcomed the opportunity to make a submission on XRB’s climate-related disclosure consultation,” said Simone Robbers, RBNZ assistant governor and general manager strategy of governance and sustainability. “We would like to congratulate XRB on their document – the framework reads as accessible, logical, and balanced. It is also world-leading in terms of moving our financial system participants to a mandatory climate-related disclosure regime. As mandated in our legislation, protecting and promoting the stability of New Zealand’s financial system is one of our objectives. Climate-related risks will have a significant effect on New Zealand’s economy and financial system; therefore, we are a strong supporter of XRB’s work in implementing climate-related disclosures.”

Addressing the challenge that climate change poses requires cross-agency collaboration. RBNZ said it is engaging closely with XRB and other financial regulators and will continue to do so. The central bank said it is also committed to ensuring that any guidance or expectations it issues are aligned with what the XRB covers in their reporting standard and what New Zealand’s conduct regulator, the FMA, is charged with overseeing.

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“We welcome the transitionary approach taken by XRB, which will encourage all climate-reporting entities to just get started,” Robbers said. “Our goal is to see entities manage their own climate-related risks in a transparent manner that ensures these risks and opportunities are incorporated into business decisions and long-term strategies.”