Beyond Compliance: Evaluating Climate Targets in New Zealand’s Insurance and Banking Sectors

2025 marks the effectuation of the AASB Australian Sustainability Reporting Standards (AASB S1 and S2). Commencing this reporting journey can appear intimidating in scope and complexity, but it is a journey that does not need to begin in the dark.

Across the Tasman, climate reporting entities (CREs) are in their second or third cycle of climate-related reporting. The Aotearoa New Zealand Climate Standards (NZ CS) and the AASB S1 and S2 share common roots, allowing for New Zealand climate statements published in prior years to serve as examples for Australian entities reporting now.

Mosaic has produced two research reports in 2025 reviewing the compliance of CREs in the financial sector with Metrics & Targets requirements of the NZ CS. Specifically, we have assessed statements lodged by licensed insurers, banks and building societies, and KiwiSaver providers for the first mandated reporting cycle (read more here).

Metrics & Targets requirements are technically complex, and relevant data is difficult to assure as reliable. The information disclosed is understood to be a strong proxy of an entity’s climate maturity. We investigated pain points contributing to why Metrics & Targets requirements were the least complied with of the NZ CS, and provide recommendations to improve disclosure quality and decision usefulness.

Our research consistently identified that larger CREs, and CREs structured to enable broader data access authority, were statistically significantly more likely to quantify the amount of their portfolio vulnerable to physical and transition climate risks. Investing in data availability early was shown as a key enabler to effectively addressing material climate-related risks and opportunities.

Our key recommendations for Australian entities reporting under AASB S1 & S2 include to:

• Start with what’s available: Optimise what’s already in-house before you can obtain ‘better’ ESG data.
• Be specific where possible: Your available metrics may relate to credit exposure, equity and debt holdings, or trading positions. Where possible, these should be broken down by industry, geography, and credit quality - and should also be assessed under different climate scenarios.
• Describe how your services align with a low emissions, climate-resilient future: Use metrics for your financial intermediary activities (e.g. investment strategy, insurance underwriting policies) to evidence how you are supporting established climate goals.
• Design climate-related targets to be aligned with established frameworks: E.g. the SBTi or Net Zero Investment Framework (NZIF), to support credibility.

If you are looking to begin or accelerate your sustainability journey and secure long-term strategic resilience, Mosaic would be thrilled to get in touch.

Dr Jason Cordier Mathieu Hemery CHEN CHEN Bethany Waller Tracey Berry