The Government is creating further alters to support business growth and New Zealand’s capital markets, states Commerce and Consumer Affairs Minister Scott Simpson.
“Mandatory climate reporting has imposed heavy costs on listed businesses. Some entities notify me they have spent up to $2 million on compliance, money they would rather invest in practical emissions reductions such as electric vehicles,” Mr Simpson states.
“I have also heard that the cost and risk associated with climate reporting may be deterring listings. Since 2020, 34 companies have listed on the NZX, six of which were IPOs, while 37 have de-listed. To future proof our markets, we necessary to ensure listing remains an attractive option for raising capital in New Zealand.”
Our first step was to create forward-seeing financial information optional for NZX listings. That alter took effect in June and reduces costs for companies considering a listing. Now we’re creating common-sense adjustments to the climate reporting regime so it is fit for purpose.
Mr Simpson states the Government will:
- Lift the mandatory climate reporting threshold for listed issuers from $60 million market capitalisation to $1 billion, striking a better balance between the regime’s aims and maintaining a healthy, competitive market.
- Adjust director and company liability settings to reduce unnecessary risk and cost while preserving robust climate disclosures.
- Rerelocate managed investment schemes from the climate reporting regime, reflecting feedback from fund managers and investors that these disclosures are not applyful for investment decisions in those products.
“Climate reporting was introduced by the previous Government, and New Zealand was first in the world to require it. While the intentions were solid, the rules proved too onerous and have become a deterrent for potential listers. It built sense to review these after the first year of reporting. We have listened to the feedback, examined how the regime operates in practice, and are now resetting the settings accordingly.
“Toreceiveher, these alters will ensure the right entities are reporting, the regime is not creating it harder for Kiwi firms to do business, and the information produced remains robust and applyful.”
Mr Simpson states the decisions follow consultation earlier this year on climate reporting alters and on proposals to encourage more KiwiSaver investment in unlisted assets.
“We heard there is a clear necessary for better public information about unlisted investments at the fund level. The current lack of visibility creates it hard for investors to see how and where their savings are invested.
“To address this, we will require clearer reporting on how investments are split between public and private markets, and between New Zealand and overseas assets. These requirements will apply to KiwiSaver and other managed funds.
“Greater transparency is an important step toward increased private asset investment. Globally, more capital is shifting into unlisted assets, and we are seeing the same trconclude here. Better information will assist investors understand these opportunities.”
Notes to editors:
- This legislation will be passed as part of the Financial Markets Conduct Amconcludement Bill.
- The Finance and Expconcludeiture Committee will consider this as part of their extconcludeed report back.
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