By Martin Fryer, Head of Strategy and Disclosures
New Zealand’s External Reporting Board (XRB) has released its draft climate reporting roadmap for consultation. For businesses in New Zealand and Australia, this is a useful signal. Climate reporting is moving towards greater alignment with international standards and with requirements across the Tasman.
That is progress. Many businesses do not operate neatly within one country. A New Zealand company may have Australian investors, overseas customers, a global parent company or procurement requirements linked to international standards. An Australian business may need to provide climate and sustainability information to customers in New Zealand, Europe or Asia.
The more reporting standards align, the easier it should become to produce information once and use it many times.
But alignment will not solve the bigger reporting challenge.
Climate reporting is becoming more connected
The XRB roadmap proposes a new climate standard: New Zealand International Financial Reporting Standard S2 Climate-related Disclosures (NZ IFRS S2). This would be based on International Financial Reporting Standard S2 Climate-related Disclosures (IFRS S2), the climate disclosure standard developed by the International Sustainability Standards Board (ISSB).
The roadmap also proposes considering how New Zealand’s approach should align with Australia’s Australian Sustainability Reporting Standard AASB S2 Climate-related Disclosures (AASB S2), while still allowing for New Zealand-specific settings.
Australia is already on this path. Mandatory climate-related financial reporting began there on 1 January 2025, with requirements phased in for different groups of entities.
For businesses operating across both markets, it would reduce duplication, support comparability and make it easier for investors, lenders and other users to understand climate-related risks and opportunities.
So far, so sensible.
Climate is only part of the story
The problem is that businesses are not only being asked about climate.
They are also being asked about nature, human rights, supply chains, circularity, packaging, water, waste, modern slavery, diversity, community impact and progress against sustainability targets.
Some of these questions come from regulators. Many come from investors, customers, banks, insurers, procurement teams, rating platforms and employees. This is where reporting starts to sprawl.
In a high-level review of New Zealand climate reporting entities, I found that roughly 30% produced a stand-alone sustainability report. Around 45% referred to the Global Reporting Initiative (GRI) and around 35% followed integrated reporting. Around 30% referred to the United Nations Sustainable Development Goals (SDGs) in some way.
Some used these frameworks well. Others mentioned them without clearly linking them to performance, strategy or the organisation’s real contribution.
That is the risk. Not that businesses use more than one framework. Often, they need to. The risk is that frameworks start driving the communication, rather than supporting it.
Bigger reports are not always better reports
A business can comply with a standard and still fail to communicate clearly. It can publish a long report and still leave readers unsure what changed, what matters most, what evidence sits behind the claims and how sustainability issues affect the organisation’s future performance. This creates a real tension.
Putting sustainability information into the annual report can show that sustainability is part of business performance, not a side project. It can help connect sustainability data with financial data. But trying to include everything in one annual report can turn it into a document few people read.
A stand-alone sustainability report gives an organisation more space to explain its impacts, targets, progress and challenges. But if it sits apart from the annual report, with different language, different numbers and little connection to business strategy, sustainability can look separate from the core organisation.
Neither approach is automatically right. Neither is automatically wrong.
Start with the reader, not the framework.
This is why businesses should treat reporting as a strategic communications exercise, not just a compliance exercise.
Before deciding where information belongs, organisations should ask:
Who is asking for this information? Who will read it? What decisions will they make with it? How important is it to our finances, reputation, market access and stakeholders? What evidence do we need to support what we say?
These questions help separate useful disclosure from noise.
They also help businesses decide what belongs in the annual report, what belongs in a climate statement, what belongs in a stand-alone sustainability report, what belongs on the website and what should be kept as supporting evidence for customers, auditors or procurement teams.
The XRB roadmap is a useful step towards a more aligned climate reporting future. But alignment does not remove the need for judgement. It increases the need for a clear reporting architecture.
The future of reporting will not be won by producing the biggest report.
It will be won by organisations that know what matters, can prove what they say and can explain it clearly to the people who need to know.
July 2026