New climate reporting in Aotearoa means that from this year, many investors will be able to see the greenhouse gas emissions of the funds they invest in. We sat down with Sue Walker, Senior Manager Responsible Investment at Harbour Asset Management* to find out more.

What is the new climate reporting, and why does it matter?

In New Zealand there is new climate reporting legislation, with around 200 entities required to produce climate-related disclosures (CRD). The Aotearoa New Zealand Climate Standards provide a framework for investment providers** to report on the climate-related impacts of their investments, including climate risks and opportunities.

This matters because the new reporting brings better transparency for investors, making it easier for you to compare things like greenhouse gas (GHG) emissions for the funds you invest in. You can also find out whether your investment provider has set targets to reduce emissions in its portfolios, and view the progress being made towards achieving those targets.

For investment providers, climate data provides valuable information for guiding investment decisions. While there is currently a higher degree of variability in climate data, this will improve over time, making comparison across providers easier for investors.

How does climate risk show up in my investments?

Climate risk consists of two key elements – physical risk and transition risk.


Physical risk

This relates to activities that are impacted by the physical aspects of climate change due to their significant dependence on the natural environment. This type of risk manifests itself through either an acute event (such as flooding or wildfires) and chronic risk or longer-term shifts in climate (such as an increase in temperature). There are many examples of significant weather events where the intensity of these events is attributed to climate change.

• The North Island flooding and Cyclone Gabrielle in early 2023 saw companies have short-term interruptions to their operations, as well as longer-term impacts to their business, as insurance doesn’t always cover the full cost of events like this.
• Many companies are beginning to invest in adaptation measures such as sea walls and storm water management, to help mitigate the impact of future events.

Transition risk

Transition risk reflects a company or country’s readiness to transition to a low-carbon economy. This includes policy, legal, technological and market changes in response to mitigating and adapting to climate change. Carbon-intensive companies are more likely to be impacted by the transition to a low-carbon economy, however, the demand for raw materials and new climate regulations will mean almost every sector and geography will be impacted.

• Climate commitments are starting to be reflected in trade agreements with key trading partners. For example, the New Zealand EU free trade agreement that commenced in May 2024 contains ambitious outcomes on climate action and commitments under the Paris Agreement. The agreement also eliminates customs duties on a list of environmentally beneficial goods.
• Inclusion of climate commitments in trade agreements will require both country and company level action to reduce emissions and protect the environment, with an expectation that companies with strong sustainability credentials will benefit from these policy settings.

Where can I learn more?

Climate statements for the BNZ KiwiSaver Scheme, YouWealth, and Private Wealth Series for the period to 31 March 2024 were recently published by BNZ Investment Services Limited (BNZISL). BNZISL is the manager of investment products available through BNZ and, as at 31 March 2024, was a wholly-owned subsidiary of BNZ. BNZISL ceased to be owned by BNZ from 1 May 2024 and is now a wholly-owned subsidiary of Harbour Asset Management Limited.

You can view and download the climate statements by clicking the links below. These have more information on the governance, strategy, risk management, metrics and targets for each scheme, and include carbon metrics for the specific fund that you’re invested in:

• 2024 BNZ KiwiSaver Scheme Climate-Related Disclosures
• 2024 YouWealth Climate-Related Disclosures
• 2024 Private Wealth Series Climate-Related Disclosures

The reporting builds on the net zero GHG emissions commitments made in relation to these investment products and details progress against BNZISL’s emissions targets as at 31 March 2024.

The BNZISL responsible investment policy forms guiding principles for how BNZISL decides where to invest, and drives the inclusion of environmental, social, and governance (ESG) factors considered in investment decisions. This helps ensure BNZISL investments reflect the evolving attitudes of its investors and society.