tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Thursday, June 20th, 12:13PM

News

rss
Latest Headlines

FMA on climate scenario analysis, sector reports

The Financial Markets Authority has released its scenario analysis information sheet* to help climate reporting entities (CREs) meet their obligations under the Climate-Related Disclosures (CRD) regime.

Wednesday, July 19th 2023, 6:45AM 3 Comments

by Andrea Malcolm

“Scenario analysis is a strategic tool where CREs construct plausible pathways to different world futures and analyse how resilient their current business model and strategy would be within these scenarios,” says FMA climate related disclosures manager Jenika Phipps.

Under the regime, CREs must include scenario analysis and explain how it was conducted in their annual climate statements.  The information sheet explains the FMA’s expectations for the scenario analysis disclosures set out in the External Reporting Board’s Aotearoa New Zealand Climate Standards.

The information sheet explains the importance of scenario analysis as a tool for exploring significant uncertainties about the scale and speed of physical and transitional climate-related impacts that are likely to play out in the future.

Last month the Financial Services Council and Boutique Investment Group published a climate scenario analysis - Climate Scenario Narratives for the Financial Services Sector, which the FMA commented on in draft form.

The guide, commissioned from KPMG, provides fund managers with a common set of scenarios across short, medium and long term time horizons, which they can use to assess how climate risks and opportunities might impact their strategies over time.

Phipps says scenario analysis work has been done across multiple sectors including banking, tourism, agriculture, general insurance, energy, and building.

She says the FMA won’t monitor sector level reports and CREs will need to ensure they are relevant to their individual business. In some cases they will be broader than the ultimate disclosure requirements.

“It’s not something you can lift and shift. You do have to do additional work on top of it.”

She says for fund managers, it’s important that the scenarios used are relevant to the fund.

“There is a distinction between fund managers and the rest of the population in that they have to report per fund. Now there could be scenarios they create that would be appropriate for all of their funds or just some of their funds. It depends on the strategy of the fund and their investments.

“One piece of advice would be to assess whether they can do a scenario that would be appropriate across all funds. That assessment is quite important to making sure they start off on the right track.”

She says scenario analysis looks at risks and opportunities and sometimes opportunity seems to fall off the radar. “It’s really important that they are given equal weighting because it’s a changing world and there will be opportunities as well as risks.”

Scenario analysis forms part of the requirements under the strategy pillar of the CRD reporting regime. The other three pillars are risk management, governance, and metrics and data. 

The FMA information sheet follows the suite of CRD documents it released in June.

 

 

scenario analysis information sheet

Tags: FMA

« Bayly, fund managers on KiwiSaver for tenancy bonds Tough times ahead for NZ economy: Nikko economist »

Special Offers

Comments from our readers

On 19 July 2023 at 1:06 pm Pragmatic said:
Groan
On 20 July 2023 at 8:51 am Amused said:
If we ever needed proof the country is currently heading in the wrong direction with its priorities it would be Climate-Related Disclosures (CRD) been applied to the financial services industry. So far New Zealand is the only country where large companies and entities are required by the government to include climate disclosure as part of their annual reporting. The Environmental Protection Authority stated in 2022 that none of New Zealand's biggest climate polluters were associated with financial services. It is only ideology then that has the FMA now forcing this requirement upon the banks and insurers etc.

As far as the financial services industry goes, I give the Climate-Related Disclosures (CRD) regime the approximate shelf life of a lettuce if we see a change of Government in October. Clearly the only people who are benefiting from this unnecessary regulation are the ever-burgeoning number of Wellington bureaucrats. Well, it’s now 85 days to the general election and the age of the bureaucrat is hopefully about to end soon.

On 21 July 2023 at 8:22 am coolrunnings said:
We’ll said Amused, roll on October

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.09 6.95
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 20 June 2024 10:39am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com