Climate reporting for non-mandatory entities

Climate reporting has changed. Climate risk hasn’t.

Changes to New Zealand’s climate-related disclosure mean some companies will no longer be required to report under the XRB’s NZ Climate Standards. That reduces the compliance burden, but doesn’t remove the business need to understand and explain climate-related risk, resilience and transition planning.

For most companies, the better question is not whether they still have to report, but “what do our investors, lenders, insurers, customers and partners still need to know about how climate change affects our future?”

The real opportunity is to move from compliance-heavy reporting to right-sized, credible and useful disclosure that supports clearer strategy and delivery.

In this article, we cover:

1. Why companies should continue to disclose
2. Consideration of a full range of different options for publishing disclosures
3. Practical guidelines for content
4. Connecting feasible plans with credible disclosures.

1. Why companies should continue to disclose

There are strong commercial reasons to keep disclosing relevant climate information, even where it is no longer mandatory.

Capital providers still care

Banks, investors and insurers still need to understand how climate change affects risk, value and long-term performance.

They may want to know how exposed the business is to physical climate risks, whether transition risks could affect revenue, costs or assets, whether emissions targets are credible, how climate issues affect capital needs, and whether governance and accountability are strong enough.

Less disclosure can mean more uncertainty. And uncertainty can affect access to finance, insurance and investment confidence.

Customers and supply chains are raising expectations

Climate questions are increasingly part of procurement, supplier due diligence and Scope 3 emissions reporting.  A company may no longer be required to report under New Zealand law, but still needs to provide climate information to major customers, banks, parent companies, insurers or offshore partners.

This is particularly important for exporters and companies connected to Australia, the UK, Europe or global supply chains.

Global markets are still moving toward disclosure

New Zealand’s threshold changes should not be read as a global retreat from climate disclosure. Australia’s mandatory climate reporting regime is already underway. ISSB standards are becoming an important global baseline. Transition plan guidance is moving into the mainstream through the IFRS Foundation and the former UK Transition Plan Taskforce.

Overall, the focus is shifting from whether companies disclose to whether their disclosures show a credible plan and support stronger governance, capital planning, implementation, assumptions, dependencies, adaptation and resilience.

Silence can damage trust

For companies that have already reported, stopping abruptly can create a credibility gap. Stakeholders may wonder whether climate risks are still being managed, whether targets remain live, or whether the business is stepping back from a more transparent approach.

A simpler disclosure may be entirely appropriate, whereas saying nothing can easily send the wrong signal.

Disclosure improves decision-making

Good climate disclosure is not just about communication. It forces better management questions:

• What climate risks are genuinely material?
• Where are our assets, operations and supply chains exposed?
• What assumptions underpin our strategy?
• Are our targets backed by credible actions?
• Are capital decisions aligned with our stated direction?

The value is not the report itself. The value lies in the discipline of connecting climate risk, strategy, governance, investment and performance.

2. Considering different disclosure options

Companies don’t need to return to a full NZ CS-style climate statement. The right disclosure option depends on size, risk, audience and maturity.

Option	Pros	Cons	Best suited to
Full voluntary NZ CS-aligned climate statement	Strong continuity and credibility; familiar to investors and lenders.	Can be costly and involve significant effort.	Larger listed companies, infrastructure owners, capital-intensive businesses.
Simplified annual report disclosure	Practical, visible and proportionate. Keeps climate linked to business performance.	May not meet all detailed investor or lender needs.	Companies wanting public transparency without full formal reporting.
Transition plan as the core disclosure vehicle	Connects climate risk, emissions reduction, resilience, capital and action into one strategic story.	Requires cross-business input and may expose gaps.	Companies wanting disclosure to support strategy, confidence and accountability.
Sustainability or ESG report section	Useful where climate, nature, people and social impact are connected.	Climate detail can become diluted.	Companies with broader sustainability programmes.
Website climate update	Low cost, accessible and easy to update.	Can look lightweight if not evidenced and governed.	Smaller companies or those early in their journey.
Investor, lender or customer climate pack	Highly practical and focused on real decision-makers.	Less publicly transparent; may require tailoring for different audiences.	Companies responding to finance, insurance, procurement or customer requests.
Supplier platform disclosure, such as CDP or EcoVadis	Supports customer expectations and market access.	Platform-led rather than strategy-led.	Exporters and suppliers to large corporates.
GHG inventory and progress update	Simple, focused and cost-effective.	Too narrow where climate risks materially affect assets, strategy or resilience.	Early-stage companies or those with low exposure.

For many businesses, the best option may be a hybrid approach: a concise public climate update, supported by a practical transition plan and targeted information for lenders, insurers, customers and investors.

3. Practical guidelines for content

Good disclosure should be proportionate yet credible. Companies should focus on five questions.

Audience: who wants what information?

A board, bank, insurer, investor, customer and employee group may each need different information. Start with the audience and any specific decisions the disclosure needs to support.

What is genuinely material?

Focus on the issues that could affect value, risk, resilience, strategy or stakeholder confidence.

That may include emissions, physical asset exposure, insurance, supply chain disruption, customer demand, technological change, regulation, workforce capability, and land, water, and nature dependencies.

What is the strategic story?

A credible transition plan can provide a convenient “home” for climate disclosures, framed as a coherent strategic story that links climate risk with business direction.

It explains how the business intends to remain viable, competitive and trusted in a low-emissions, climate-changed world.

Using this approach can answer:

• What are we trying to become?
• What needs to change?
• What are we doing now?
• What depends on others?
• What decisions are already changing?
• How will we track progress?
• How will we adapt if assumptions change?

How will delivery be shown?

Targets are not enough. Stakeholders increasingly want to see the delivery logic and plans sitting behind them.

Useful disclosure should explain actions, sequencing, ownership, timeframes, dependencies, capital implications and progress measures.

How will credibility be protected?

Voluntary disclosure still needs care. Claims must be evidence-based, consistent and capable of scrutiny.

Credibility is strengthened by being clear about data limits, assumptions, external dependencies, trade-offs, uncertainty and the role of carbon credits, if any.

4. Connecting feasible plans with credible disclosures

For many companies, disclosure has become the driver for action. A board, lender, insurer, investor or customer asks for climate information, and the immediate question becomes: what do we need to report? Yet credible disclosure depends on a deeper question: what is our practical pathway for managing climate risk and preparing for a low-emissions, climate-changed future?

Too often, these are treated separately. Reporting teams prepare the disclosure, while the work needed to understand hazard exposure, asset vulnerability, adaptation options, emissions reduction, nature-related dependencies, and capital implications sits behind the process or in another part of the organisation.

That creates two risks: disclosure that is too narrative, or technical work that remains fragmented and disconnected from the strategic story and delivery decisions stakeholders need.

Tonkin + Taylor can help organisations bring these together.

Our short report, ‘From narrative to navigation’, explains that credible transition planning is not about saying the right things; it is about showing how better decisions are made under uncertainty. It includes practical tools, such as credibility quick checks and a maturity framework, to support progress.

The critical element here is that plans need to be credible. As sustainability, environmental and engineering specialists, Tonkin + Taylor can help companies use disclosure as a catalyst for better planning: assessing physical climate hazard exposure, understanding asset and infrastructure vulnerability, identifying adaptation pathways, evaluating nature-positive and resilience solutions, and translating this into practical investment and delivery plans.

The result is disclosure grounded in real choices, constraints and actions — and a stronger basis for board decisions, lender conversations, insurance renewals, procurement responses, investor engagement and capital planning.

That is the value: disclosure and delivery working together to create clearer priorities, stronger evidence, practical solutions and a more credible story about how the business is managing risk and preparing for the future.

Closing thought

For companies no longer required to report on climate, the choice is not between full reporting and no reporting.

The question executive teams should ask is: what level of climate disclosure will maintain trust, support access to capital, satisfy key stakeholders, and help us make better strategic decisions?

And the questions your business should be asking are: what should we keep disclosing, what can we simplify, and how do we turn this into a credible transition story?

We’re happy to talk through where we can help – reach out to our team today.