IMHO: With nature, start at the end
Treating nature like any other critical risk means directors can plan for and avoid impacts now – before the bill comes due.
OPINION
Financial markets reform: turning down the liability, turning up the signal
The IoD and Chapter Zero NZ endorse changes so listed boards rely on core duties and deliver more meaningful climate reporting.
The Institute of Directors (IoD) and Chapter Zero New Zealand support the Amendment Paper to the Financial Markets Conduct Amendment Bill, which removes personal director liability for climate-related disclosure reporting and makes climate-specific changes to the Fair Trading Act 1986.
For IoD members – especially those serving on listed company boards and those undertaking voluntary climate reporting – this change matters. Uncertainty about personal liability has been reducing the usefulness of disclosures, increasing legal and assurance costs, and encouraging overly conservative reporting.
Reframing climate disclosures as a governance and transparency exercise, rather than a source of personal criminal exposure, should enable boards to focus on substance – material climate risks and opportunities, strategy and capital allocation.
The result should be clearer and more decision-useful reporting for investors and the market, and greater confidence for directors to lead meaningful climate governance.
Our submission: strong governance, not punitive liability
The IoD and Chapter Zero New Zealand argue that Aotearoa New Zealand already has appropriate safeguards in core directors’ duties under the Companies Act 1993: due diligence, care and skill, acting in good faith, and acting in the best interests of the company.
The submission urges a lift in practice through good governance rather than punitive liability, pointing directors to proven resources such as the IoD’s Four Pillars of Governance Best Practice, the Chapter Zero New Zealand Board Toolkit, and the IoD’s governance capability building programmes.
Removing specific director liability for climate disclosures should unlock better reporting by both mandatory and voluntary reporters, while maintaining high standards of board oversight.
For listed company directors, this shift supports transparent markets, improves comparability over time, and enables boards to engage more constructively with assurance providers, management and investors on climate-related risks, opportunities and long-term value creation.
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