NZ Govt Eases Climate Rules to Boost Business and Capital Market Growth

In a decisive move to bolster New Zealand's business environment and reinvigorate its capital markets, Commerce and Consumer Affairs Minister Scott Simpson has announced a suite of regulatory changes aimed at making it easier and more attractive for companies to list and grow in New Zealand. A key focus of the reforms is easing the burden of mandatory climate-related disclosures, which have proven costly and, in some cases, counterproductive.

Addressing Business Concerns Over Climate Compliance

Minister Simpson acknowledged that while the climate reporting regime, introduced by the previous Government, had good intentions, the implementation has imposed excessive compliance costs on listed businesses—sometimes amounting to millions of dollars.

"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," Simpson said.

In addition to the financial burden, the Minister cited concerns that the risk and cost associated with climate reporting requirements have deterred companies from seeking listings on the New Zealand Stock Exchange (NZX).

Between 2020 and 2024, 34 companies listed on the NZX—only six via initial public offerings (IPOs)—while 37 companies de-listed in the same period. The numbers reflect a troubling trend that the Government aims to reverse by making regulatory requirements more proportionate and business-friendly.

Key Climate Reporting Reforms

To address these challenges, the Government will implement the following three major changes to the climate-related financial disclosure regime:

1. Raising the Reporting Threshold

   • The mandatory climate reporting threshold for listed issuers will be lifted from $60 million to $1 billion in market capitalisation.

   • This change means only the largest listed companies will be required to comply with the regime, reducing the regulatory burden on smaller entities and improving the balance between transparency and competitiveness.

2. Adjusting Director and Company Liability

   • The Government will recalibrate liability settings for directors and companies involved in climate reporting.

   • This aims to reduce unnecessary legal risk and costs, while still preserving robust and meaningful disclosures.

3. Removing Managed Investment Schemes from the Regime

   • Managed investment schemes (MISs) will be excluded from mandatory climate reporting.

   • Simpson explained that investors and fund managers had questioned the usefulness of climate-related disclosures for these products, prompting the decision to remove them.

"These are common-sense adjustments to ensure the regime remains fit for purpose," Simpson said. "We have listened to feedback, examined how the regime operates in practice, and are now resetting the settings accordingly."

Broader Strategy to Support Market Growth

The changes come as part of a broader initiative by the Government to revive New Zealand's capital markets, enhance investment transparency, and encourage long-term growth.

One of the early steps in this direction was the June 2025 decision to make forward-looking financial information optional for NZX listings, reducing another barrier for companies considering going public.

Simpson framed the climate reporting reforms as a continuation of that effort, aiming to ensure that compliance rules don't discourage entrepreneurship or innovation.

"Together, these changes will ensure the right entities are reporting, the regime is not making it harder for Kiwi firms to do business, and the information produced remains robust and useful," he said.

Improving Transparency in KiwiSaver and Unlisted Assets

The Minister also addressed the growing importance of unlisted investments, particularly within KiwiSaver and managed funds. Consultation earlier in 2025 revealed that investors lack visibility into how their savings are allocated, making it difficult to understand exposure to public vs private markets or domestic vs overseas investments.

To improve transparency, the Government will require KiwiSaver providers and fund managers to report more clearly on:

• The split between public and private market investments

• The division of assets between New Zealand and international holdings

This will not only empower investors but also pave the way for greater participation in private markets, in line with global trends.

"Greater transparency is an important step toward increased private asset investment," Simpson explained. "Better information will help investors understand these opportunities."

A Business-Friendly but Responsible Approach

While climate-related disclosures will still apply to the country's largest companies, the changes signal a significant regulatory recalibration. The Government appears committed to maintaining climate accountability—but not at the cost of stifling innovation or discouraging market participation.

The reforms are expected to be welcomed by listed businesses, investors, and the wider business community, as they aim to streamline compliance, encourage new listings, and channel capital more effectively into growth-oriented activities, including actual emissions reduction initiatives.

With these reforms, New Zealand is realigning its regulatory landscape to support economic competitiveness while still promoting transparency and climate responsibility—a move that may serve as a model for other jurisdictions facing similar challenges.