The Sustainable Business Council (SBC) is
hailing the NZX as taking a lead in setting New Zealand on a path to global
best-practice around non-financial disclosure. The proposals are outlined in the
NZX proposed updates to its Corporate Governance Guidelines released yesterday
(31 August).

The Sustainable Business Council (SBC) is
hailing the NZX as taking a lead in setting New Zealand on a path to global
best-practice around non-financial disclosure. The proposals are outlined in the
NZX proposed updates to its Corporate Governance Guidelines released yesterday
(31 August).

SBC’s Executive
Director Abbie Reynolds says they are excited by the proposals and commend NZX
for taking a lead in New Zealand.

“It’s the first time the NZX has
included guidelines for companies to report on non-financial matters around environmental
and social performance. Not only that but they are using the global
best-practice guidelines as we recommended in our submission.”

“New Zealand is behind the world in
its approach to non-financial disclosure and so we are very excited to see the
NZX taking a lead, the next critical step in getting New Zealand in line with
the strong global shift toward greater transparency,” she says.

“The NZX has really listened to
their submitters, taking on all our recommendations including adopting a ‘report
or explain’ approach on how non-financial targets are measured. In this, the
NZX is taking a wider view than ASX’s approach of focussing on risk which we
commend.”

A number of stock exchanges and
regulators globally had adopted a ‘report or explain’ approach on
sustainability performance, which the SBC supported over a voluntary or
mandatory approach as it provided guidance for companies, while also allowing
greater flexibility for how companies report.

BusinessNZ Chief Executive Kirk
hope says the move is forward-looking.

“The proposals will encourage more
New Zealand companies to take on sustainability reporting and ensure that we
remain in step with global best practice,” Kirk Hope says.

The SBC was also pleased to see the
NZX referring to the global Sustainable Stock Exchange Initiative as a source
of guidance, which they had recommended in their submission.

“Globally, mandatory reporting of
sustainability performance is increasing alongside the greater demand for
transparency. Investors are pushing for it, they want a more holistic view of
company performance and for businesses, it is in their best interests given the
extent to which non-financial matters affect their finances,” says Ms Reynolds.

“The NZX’s proposals are very
important for New Zealand, the next critical step toward greater transparency.”

 “From a sustainability point of view – if
picked up – this will really encourage Boards to get better quality data about
the non-financial performance, and increase focus on sustainability across the
business community in general.”

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