FMA lays out CRD scenario analysis compliance expectations

The Financial Markets Authority (FMA) has recently published an information sheet outlining compliance expectations for scenario analysis disclosures within the climate-related disclosures (CRD) regime.

This guidance is aimed at assisting climate reporting entities (CREs), their directors, and other stakeholders involved in environmental reporting. Under the CRD framework, entities are required to conduct scenario analysis and provide transparent disclosure of the processes followed.

The information sheet highlights key aspects, including how the FMA will apply the CRD framework concerning scenario analysis. It also includes specific areas the FMA will examine to gauge compliance with the stipulated standards, as well as additional considerations to aid CREs in meeting the disclosure requirements.

An updated version of the information sheet, released in October, addresses queries raised during engagements with climate reporting entities and industry organisations. Notable inclusions in this update involve:

• The update offers further elucidation and specifics concerning quantification within the scope of scenario analysis
• A visual aid has been added to illustrate the connections and correlations between strategy disclosures in NZ CS 1 and how they interrelate or support each other
• Several minor updates have been integrated to furnish additional clarity and contextual understanding within the document

A few weeks ago, the Kiwi regulator also issued its conclusive guidance for CREs regarding their obligations in record-keeping.

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