Businesses will need to continue to have a sharp focus on climate issues in 2025, with developments expected on multiple fronts. But the insights learned from the first year of mandatory emissions reporting, and the path charted in other jurisdictions, can offer vital guidance, according to a new report.
In The Big Picture: Climate Change – Navigating the risks, leading law firm Bell Gully takes a closer look at the key lessons that companies can learn from the issues faced in 2024, and what they need to know ahead of changes still to come.
Next year, climate reporting entities will be required to disclose the transition plan aspects of their strategies, including how their business models and strategies might change to address climate-related risks and opportunities. Legislation for a framework on climate adaptation is also expected in 2025, and there’s an ongoing focus on misleading sustainability claims around the world, both by regulators and those seeking change through the courts.
Bell Gully partner Richard Massey says it’s important for companies to keep on top of the particular issues that will affect them, and to take advantage of insights offered by trends in published climate reports and developing regulatory guidance. When it comes to ensuring the accuracy of sustainability claims, a particular focus for Massey, it has become clear that “greenwashing” is becoming a much more complex risk for businesses to manage than some traditional regulatory risks.
"Ensuring accurate and substantiated representations of the environmental impact of goods or services is not just a legal obligation - it’s also becoming a business imperative given the reputational considerations involved," he says. “What we can see happening overseas, particularly a growing enforcement focus on issues like greenwashing, can provide valuable insights into what is to come in New Zealand. Businesses have an opportunity to learn from these developments to support their future strategies and build trust in a market increasingly focused on sustainability."
There will be relief for climate-reporting entities in some areas following a recent confirmation by the External Reporting Board (XRB) that it will provide an additional year of relief from some of the reporting requirements, including the anticipated financial impacts of climate-related risks and opportunities. But despite some initial consideration the XRB has decided not to defer transition planning requirements, which are now set to become mandatory during CREs’ second reporting period.
Meanwhile, new developments around climate adaptation will be a priority for many companies to assess, particularly in areas like infrastructure. “We have seen the first glimpse of an adaptation framework with the release of the Finance and Expenditure Select Committee’s report from the cross-party Inquiry into Climate Adaptation this year, but with legislation expected in 2025, next year will be a big year.” said Bell Gully partner Natasha Garvan, who heads the firm’s environment and planning practice. “There will be a lot for local government, communities, and businesses to process and understand once we have more clarity on New Zealand’s framework for addressing climate adaption.”
Read The Big Picture: Climate Change – Navigating the risks here.