Climate Risk, including Climate-related Disclosure

In New Zealand, the Financial Markets Conduct Act 2013 (FMCA) amended in 2021, requires that Climate Reporting Entities (CREs), specified by a threshold of capital or assets, report their climate-related risks using a set of standards developed by the External Reporting Board (XRB).

In Australia, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 amended the Corporations Act 2001, mandating climate reporting for entities. The implementation of the regime was done by groups, with larger organisations being part of Group 1 (i.e. needing to report for financial years starting on 01 January 2025 or later).

In order for CREs to take the most benefit from the new requirement, it should be considered as more than just a compliance exercise. In that sense, it is quite similar to conduct risk and associated remediation: the disclosure may lead to structural changes and transform the way a CRE considers its future.

“Perfect is the enemy of done” – because of the complexity brought by the disclosure requirements, it may be preferable to start early and small, and grow in maturity in the subsequent iterations.

Climate reporting – Current Challenges

Following several reporting cycles under New Zealand's Climate-related Disclosure (CRD) regime, organisations are increasingly focused on improving the quality, consistency, and decision-usefulness of their disclosures, while further embedding climate-related considerations into strategic and risk management processes.

Climate-related disclosure is increasingly expected to demonstrate how climate-related risks and opportunities influence business strategy, risk management, and decision-making, rather than simply meeting reporting requirements.¹
Effective climate-related disclosure requires ongoing engagement from both Board and management teams to ensure appropriate governance, oversight, and integration into existing business and risk management processes.¹
Climate-related data, methodologies, and modelling techniques continue to evolve. Organisations often face challenges in improving data quality, refining scenario analysis, and enhancing the measurement of financed emissions and other climate-related metrics.¹
As assurance and regulatory expectations mature, greater emphasis is being placed on robust documentation, governance, controls, and transparency to support reliable and decision-useful disclosures.²

Australian entities are in the initial years of climate reporting, which may result in teething issues during the establishment of new capabilities. This can be mitigated by perusing lessons learned on this side of the Tasman of the New Zealand climate reporting regime.

1. Climate Reporting Entities (CREs) | Financial Markets Authority

Modern Slavery reporting

Modern slavery reporting is mandatory in Australia, and similar requirements are emerging in New Zealand, with a potential implementation horizon of 2028.

The report requirements are aligned in intent to the CRD as entities will need to describe their governance process, risk management processes, current impacts and metrics used to monitor modern slavery risks in the supply chain.

In comparison to Australia reporting regime, more emphasis on details will be expected, and it will be crucial for entities meeting the reporting thresholds to streamline their processes so that they can better influence their suppliers and drive the desired outcomes.

Recent Work

Mosaic has experts available to support you.

Expertise includes:

Project Management for the production of the Climate Related Disclosure (under the voluntary regime).
Subject Matter Expertise, demonstrated through analysis of current state, gap analysis, recommendations of way forward, including considerations on record keeping.
Analysis of data providers for addressing physical risk and specific financed emissions needs.
Validation of methodology calculation for specific metrics from data providers.
Workshop facilitation for scenario analysis, climate risks and opportunities.
Supporting client CRD projects with temporary team members who have relevant climate experience.
Operational Emission Calculation: Expertise in data collection and operational emissions calculation.
Draft Disclosure Generation: Experienced in creating climate-related financial disclosures.
Traceability Matrix Development: Skilled in mapping disclosures to requirements with traceability matrices.

Our partners

Sustainability is a complex environment to navigate, with specific subject matter expertise. We have established partnerships to augment our capabilities and service offering.

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Informed.City

The Informed.City team brings a wealth of climate-related expertise, leveraging their experience to advise a range of New Zealand and Australasian clients spanning financial, corporate and government sectors.

Our partnership with Informed.City deepens the advisory and support provided through the lifecycle of the CRD and underlying processes, especially so for scenario analysis and the determination of anticipated impacts. Combined with Mosaic, Informed.City’s deep expertise can supplement and support training for team members leading climate-related activity.