Climate Risk

Scientists now state that it is extremely likely (95% confidence level) that the earth’s climate is changing as a result of human-related emissions of greenhouse gases (IPCC¹).

Climate change is exposing organisations to both physical risks (such as more frequent and more intense storms) and transition risks (such as legislative and regulatory measures to support decarbonisation of the economy).

These risks are expected to increase considerably in the coming years and organisations need to plan ahead.

PathLight can:

conduct a gap analysis between your organisation’s current approach to climate risk and external reporting requirements - see below
develop a roadmap to address identified gaps on a reasonable timeline
support your organisation as you implement the workstreams to address those gaps
support your organisation as you report for the first time and beyond
provide ongoing advice to help your organisation stay ahead of the curve in this fast-moving area.

PathLight’s services in this area focus on Climate-related reporting requirements, such as:

the External Reporting Board’s (XRB) Climate-related Disclosure framework for New Zealand (2022)
the Australian Accounting Standard Board’s (AASB) S2 Climate-related Disclosures standard (2024)

both of which have their origin in the Task Force on Climate-related Financial Disclosures (TCFD), which disbanded following the issue of Climate and Sustainability Standards by the International Sustainability Standards Board (ISSB).

This approach covers the risks and opportunities for an organisation as a result of the changing climate and how the organisation plans to adapt to and mitigate those risks and benefit from the opportunities.

The disclosure requirements are based on the four pillars of Governance, Strategy, Risk Management, and Metrics & Targets.

The XRB’s requirements are mandatory for most NZX listed companies and large financial institutions in New Zealand, for financial years starting after 31 December 2022.

Climate-related disclosure under the AASB’s standard is mandatory for financial years beginning on or after 1 January 2025 for the largest Australian entities, with other entities following in a phased implementation approach over two further stages.