New Zealand Maps Transition to IFRS S2-Aligned Climate Reporting
The consultation focuses on whether New Zealand should keep adapting NZ CS or set a clearer long-term route through a standard based on IFRS S2. It also raises how closely future requirements should align with Australia’s climate reporting framework.
New Zealand’s External Reporting Board (XRB) has opened consultation on a draft climate reporting roadmap that could move the country towards a new standard, NZ IFRS S2 Climate-related Disclosures. The proposal comes at a point when New Zealand is assessing how its existing climate reporting framework should evolve alongside ISSB Standards and Australia’s climate disclosure regime.
The proposed shift would move New Zealand from a domestic TCFD-based climate reporting framework towards a new standard based on IFRS S2, adjusted for Australian harmonisation and New Zealand’s local context.
Where the Process Stands
The draft roadmap sets out XRB’s proposed direction for climate reporting in New Zealand. It does not change current reporting obligations. Climate reporting entities continue to report under Aotearoa New Zealand Climate Standards, known as NZ CS, unless and until XRB makes final decisions after consultation.
The consultation closes on 30 September 2026. Feedback will inform whether XRB proceeds to an exposure draft of NZ IFRS S2, how the proposed standard would be designed, and which Australian or New Zealand-specific modifications may be needed.
XRB is not consulting on general sustainability reporting. The draft roadmap is focused on climate reporting and on a possible new climate standard for climate-related disclosures. XRB states that it is not proposing to issue NZ IFRS S1 as part of this roadmap.
How NZ IFRS S2 Would Be Built
XRB proposes issuing a new climate standard called NZ IFRS S2 Climate-related Disclosures. The proposed approach rests on three elements:
- international alignment, through IFRS S2 Climate-related Disclosures;
- harmonisation with Australia, where IFRS S2 differs from AASB S2 Climate-related Disclosures and the Australian Corporations Act 2001;
- local relevance, to reflect New Zealand’s legislative, regulatory, reporting and market context.
The roadmap proposes a staged process. If stakeholder feedback supports the direction of the roadmap, XRB would aim to consult on an exposure draft of NZ IFRS S2 in Q2 2027. A final NZ IFRS S2 would then be issued on 31 August 2027.
Once issued, NZ IFRS S2 would be available for early adoption by climate reporting entities for reporting periods beginning on or after 1 October 2026. Mandatory application would begin for reporting periods starting on or after 1 January 2033.
Until mandatory application begins, climate reporting entities would be able to continue using NZ CS. Early adoption would be voluntary during the transition period, but an entity that elects to apply NZ IFRS S2 would need to continue applying it for the remainder of the early adoption period and could not revert to NZ CS during that period.
Adopting IFRS S2 would not mean applying IFRS S2 alone. XRB explains that the proposed approach would also incorporate the climate-relevant portions of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information. These include conceptual foundations, general requirements, judgement, measurement uncertainty and the correction of errors.
Who Would Be Affected
The roadmap is directed at climate reporting entities, the organisations required to report under New Zealand’s climate-related disclosure framework. XRB also notes that domestic legislative settings are changing.
The Financial Markets Conduct Amendment Bill proposes to raise the threshold for equity issuers from $60 million market capitalisation to $1 billion. It also proposes to raise the threshold for debt issuers from $60 million total face value of quoted debt to $1 billion, and to remove managed investment schemes from the definition of climate reporting entity.
The assurance position would remain unchanged under the draft roadmap. Assurance over greenhouse gas emissions is required under the Financial Markets Conduct Act 2013, but XRB states that the roadmap does not change the requirement or level of assurance. It also notes that the Act does not require assurance over other disclosures in climate statements.
The Decisions Still Ahead
The draft roadmap gives New Zealand a possible direction for climate reporting, but not a settled compliance framework. The next substantive marker will be whether XRB proceeds to an exposure draft in Q2 2027 and how it resolves the open questions on Australian harmonisation and local modifications.
For organisations, the useful signal is the direction of travel. If the roadmap proceeds, climate reporting in New Zealand would move closer to IFRS S2 and place greater weight on the systems, controls and evidence behind climate-related financial information.
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