FMA publishes scenario analysis information sheet for Climate Related Disclosures regime

Media Release 
MR No. 2023 – 30 
18 July 2023 

The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has today released its scenario analysis information sheet to help climate reporting entities (CREs) meet their obligations under the Climate-Related Disclosures (CRD) regime. 

Under the regime, CREs are required to undertake scenario analysis and disclose how the process was conducted in their annual climate statements.  

The information sheet explains the FMA’s expectations for the scenario analysis disclosures set out in the External Reporting Board’s Aotearoa New Zealand Climate Standards. 

Scenario analysis is a strategic tool where CREs construct plausible pathways leading to different future worlds (i.e. scenarios) and analyse how resilient their current business model and strategy would be if it was placed within these scenarios.   

FMA Climate Related Disclosures Manager Jenika Phipps said: “We recognise that climate-related scenario analysis is a new concept for most entities in New Zealand. 

“This information sheet explains scenario analysis as an important tool to develop an exploratory approach for considering significant uncertainties, about the scale and speed of physical and transitional climate-related impacts, that are likely to play out in the future”. 

“Using climate-related scenario analysis will enable entities to better understand the inter-related dynamics of climate change, prepare for an uncertain future, and ultimately consider how to improve their long-term resilience”. 

Scenario analysis forms part of the requirements under the strategy pillar of the CRD reporting regime. The other three pillars are risk management, governance, and metrics and data.  

The information sheet follows the suite of CRD documents the FMA released in June. 

Download the Scenario analysis information sheet PDF

ENDS 

Notes 

The CRD legislation amends the Financial Markets Conduct Act 2013 (the FMC Act), the Financial Reporting Act 2013 and the Public Audit Act 2001 and inserts a new Part 7A to the FMC Act.   

The CRD regime will capture around 200 entities, comprising:  

• Large, listed issuers of quoted equity securities or quoted debt securities (over $60 million in market capitalisation or quoted debt, respectively. Issuers listed on growth markets are excluded)  
• Registered banks, credit unions and building societies with total assets over $1 billion  

• Licensed insurers with total assets over $1 billion or annual gross premium revenue over $250m  
• Managers of registered schemes, such as Kiwisaver schemes and investment funds, (other than restricted schemes) with greater than $1 billion in total assets under management.  

Visit the FMA’s website for more information about the CRD legislation. 

Media contacts:

Andrew Park  
FMA Media Relations Manager  
[email protected]
021 220 6770  

Matt Chatterton  
FMA Senior Adviser, Media Relations  
[email protected]
021 241 7868