FMA reviews first climate statements under new standards
The Financial Markets Authority (FMA) has published its insights report on the inaugural set of climate-related disclosures from climate reporting entities (CREs).
Covering 70 reports submitted for periods ending between December and March, the review evaluates compliance with New Zealand’s Climate Standards and the Financial Markets Conduct Act 2013.
Acknowledging efforts amidst challenges
Jacco Moison (pictured above), FMA head of audit, financial reporting, and climate-related disclosures, commended the efforts of reporting entities in meeting these new requirements.
“We are pleased with the efforts that CREs have made to prepare and lodge their first set of mandatory climate statements under the CRD regime,” Moison said.
Moison also acknowledged challenges faced by CREs, such as higher-than-expected costs, difficulties obtaining reliable data, and limited guidance on some topics.
Key insights from the FMA report
The FMA report emphasised several areas for improvement:
- Balancing information disclosures: Some entities provided excessive detail, risking the obscuring of key material, while others omitted important disclosures required by the climate standards. FMA recommends tailoring information to the specific needs of primary users.
- Presenting fair and balanced reports: Certain statements overemphasised positive impacts, lacking balanced or complete perspectives. Entities are encouraged to ensure fairness in their disclosures.
- Providing detailed explanations: Many entities reported on processes without explaining how they were implemented or embedded across their organisations. FMA highlighted the importance of detailed and transparent explanations.
Educative approach to compliance
FMA is adopting an educative and collaborative strategy to help CREs improve future disclosures. Two webinars will be held this month to discuss the report’s findings, with additional engagements planned for the new year.
Interested participants can register for the upcoming FMA webinars to gain further insights into best practices for climate-related reporting.
Register your interest for FMA’s upcoming webinars here.
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