The New Zealand government has introduced a series of changes to its climate reporting and capital markets regulations, aiming to streamline compliance obligations and foster a more supportive environment for business growth.
The reforms – which follow a period of industry consultation – are set to affect listed companies, managed investment schemes, and fund managers, with implications for the insurance sector and broader financial services industry.
One of the central changes involves raising the threshold for mandatory climate-related disclosures.
Listed companies will now only be required to report if their market capitalisation exceeds $1 billion, up from the previous $60 million threshold.
This adjustment means that only the largest market participants will continue to submit annual reports on climate-related risks and opportunities, while smaller entities will be exempt from these requirements.
In addition, managed investment schemes (MIS) will be removed from the climate reporting regime. This move is expected to reduce the number of entities subject to the climate disclosure framework from around 164 to 76.
The government has indicated that legislation to enact these changes, including updates to liability provisions for directors and companies, is anticipated in 2026.
Commerce and Consumer Affairs Minister Scott Simpson commented on the rationale for the reforms.
“Mandatory climate reporting has imposed heavy costs on listed businesses. Some entities tell me they have spent up to $2 million on compliance, money they would rather invest in practical emissions reductions such as electric vehicles,” he said.
Simpson also noted that the current compliance burden may have discouraged some companies from listing on the NZX, with more de-listings than new listings since 2020.
The Financial Services Council (FSC) has expressed support for the government’s approach.
Kirk Hope, FSC chief executive, said the changes represent a constructive response to industry concerns.
“These reforms are a positive step toward ensuring our capital markets remain vibrant, competitive, and accessible. We support the government’s commitment to listening to industry feedback and making adjustments that strike a better balance between transparency, cost-effectiveness, and market participation,” he said.
Hope also highlighted the importance of maintaining meaningful climate disclosures without discouraging market participation or diverting capital from productive investments.
Simpson acknowledged that while New Zealand was the first country to mandate climate reporting, a review was warranted after the first year of implementation.
“While the intentions were solid, the rules proved too onerous and have become a deterrent for potential listers. It made sense to review these after the first year of reporting,” he said.
Beyond climate reporting, the government is introducing new requirements for managed funds, including KiwiSaver schemes.
From March 2027, fund managers will need to disclose whether assets are located in New Zealand or overseas and specify the asset class, such as debt, infrastructure, or unlisted equities.
These details will be available on the Companies Office’s Disclose Register, providing investors with greater insight into the composition of managed funds.
“Greater transparency is an important step toward increased private asset investment," Simpson said. "Globally, more capital is moving into unlisted assets, and we are seeing the same trend here. Better information will help investors understand these opportunities.”
Another recent change, implemented in June 2025, allows companies making an initial public offering to opt out of providing forward-looking financial statements.
This measure is intended to lower the costs associated with listing and make the process more accessible for businesses considering entry to the public market.
The FSC has indicated its intention to continue working with the government and other stakeholders to ensure that regulatory frameworks support innovation and sustainable growth in New Zealand’s financial services sector.
