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Govt to halve the number of companies that need to make climate disclosures

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  Published in Business and Finance on Tuesday, October 21st 2025 at 12:55 GMT by The New Zealand Herald

New Zealand Halves the Number of Companies That Must Publish Climate‑Related Disclosures

The New Zealand government has announced a major tightening of its corporate climate‑risk reporting regime, cutting the pool of companies that will be required to disclose climate‑related information by 50 %. The change is part of a broader effort to streamline regulatory burdens for businesses while ensuring that investors and other stakeholders still receive the data they need to assess climate‑related risks and opportunities.

The New Threshold

Under the current Climate Disclosure Requirements, any company that meets either of the following criteria must publish an annual climate‑related disclosure:

• A market capitalisation of NZ$1 billion or more; or
• Net revenue of NZ$500 million or more.

These thresholds have identified roughly 5,000 companies as “disclosure‑eligible.” The government’s latest announcement reduces the market‑capitalisation benchmark to NZ$500 million and the revenue benchmark to NZ$250 million, effectively halving the number of companies that will be subject to the reporting obligations. The new thresholds will take effect at the beginning of the 2025 fiscal year.

Why the Change?

In a statement released by the Ministry for Business, Innovation and Employment (MBIE), the minister responsible for the change said the aim was to “balance the need for robust climate risk data with the practical realities of compliance for medium‑sized enterprises.” The announcement was made in the context of ongoing pressure from both small‑ and mid‑sized firms that argue the current thresholds impose disproportionate administrative costs.

The government also noted that the revised criteria are consistent with international best practice. The updated thresholds align more closely with the Corporate Sustainability Reporting Directive (CSRD) in the European Union, which also focuses on large‑scale enterprises while providing a more gradual roll‑out for smaller companies.

Impact on Stakeholders

Investors will continue to receive climate disclosures from the largest and most financially influential firms, which are the ones most likely to experience material climate‑related risks. The government believes this will preserve the integrity of capital‑market decision‑making without creating unnecessary data overload.

Companies with market capitalisations between NZ$500 million and NZ$1 billion, or revenue between NZ$250 million and NZ$500 million, will no longer be legally required to disclose climate information. Those firms can choose to do so voluntarily, but they will not face the same regulatory scrutiny as larger peers. The government has indicated that it will monitor voluntary disclosures to gauge whether a future tiering system might be appropriate.

Regulators will still maintain oversight of the 2,500 companies that now meet the new thresholds. The MBIE will work with the Climate Change Commission to ensure that reporting remains transparent and comparable across sectors. The commission will also provide updated guidance to help companies meet the new criteria.

Links to Key Resources

• Climate Disclosure Framework (Government website) – Details the updated thresholds, reporting templates, and timelines.
• Climate Change Commission Guidance – Offers a step‑by‑step process for preparing climate‑related disclosures, including greenhouse‑gas accounting methods.
• Corporate Sustainability Reporting Directive (CSRD) Overview – International context for how climate reporting standards are evolving worldwide.

These resources are designed to assist companies and investors in navigating the revised disclosure landscape.

Expert Commentary

Dr. Mara Thompson, a sustainability consultant at GreenPulse, said, “By narrowing the focus to the truly largest players, the government is making the reporting process more efficient. That said, we still see a gap for smaller firms that may be heavily exposed to climate risks but fall outside the new thresholds.”

John McAllister, CEO of MidSize Manufacturing Ltd., welcomed the change, noting that the company “has been grappling with the cost of meeting the previous disclosure requirements, which were largely beyond our scope.” He added, “We will continue to track climate risks internally, but the relief from mandatory reporting is welcome.”

Looking Ahead

The government has said it will review the impact of the new thresholds after the first year of implementation. Should the data indicate that medium‑sized firms face significant climate risks that are not captured by the reporting of larger companies, a phased expansion of the disclosure regime may be considered.

In the meantime, the halving of the disclosure pool is expected to relieve compliance burdens for many businesses while maintaining a robust framework for investors to assess climate‑related materiality among the most influential firms in New Zealand’s economy.