The External Reporting Board (XRB) announced that on Monday, it has approved both proposed amendments to climate and assurance standards. It has also announced a webinar to explain these amendments today, Friday, 29 November at 12pm – 1pm. A link to register for the webinar is available here.
Our CRD register observations for the first three major cohorts of statements can be found here, here, and here.
Who needs to read it? Why?
All New Zealand climate reporting entities (CREs) should note these amendments. The amendments will affect all climate statements, especially those CREs in the first cohort (31 December or 31 January year-ends) and second cohort (31 March year-ends).
What does it cover?
The amendments are to two standards: NZ CS 2 and NZ SAE 1. These respond to concerns on obtaining sufficient data for assurance over scope 3 greenhouse gas (GHG) emissions disclosures.
There are three key amendments to NZ CS 2:
- Adoption provision 8 has been created, providing an exemption for the assurance of scope 3 GHG emissions disclosures. Entities who utilise this provision must provide assurance for its scope 1 and scope 2 GHG emissions disclosures. This adoption provision is available for accounting periods ending before 31 December 2025.
- The exemptions provided by adoption provisions 2, 4, and 5 have been extended by a year.
- Adoption provisions 5 and 7 have been amended to reflect the extended exemption period of adoption provision 4.
The full amendments to NZ CS 2 can be found here.
NZ SAE 1 has been amended to reflect the amendments in NZ CS 2. The amendments can be found here.
Our view
We support the XRB’s amendments on the disclosure and assurance of scope 3 GHG emissions. These extensions should provide some relief to CREs in the first and second cohort, who can utilise the adoption provision for scope 3 GHG emissions disclosures for an additional year. These amendments should also improve the reliability of data on scope 3 GHG emissions for assurance purposes.
What next?
The XRB’s webinar and guidance documents for reporting and assurance of GHG emissions will supplement how CREs engage with these amendments. We expect these documents to be released in December 2024.
If you have any questions about the XRB’s amendments or would like to discuss your climate-related disclosures obligations, please contact one of our experts.
This article was co-authored by Ivan Zhang, a Summer Clerk in our Financial Services team.
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