NZSA Disclaimer
I was pleased to host this recent webinar on behalf of the New Zealand Shareholders’ Association (NZSA). Jane Diplock is the former Chair of the New Zealand Securities Commission, and a current board member of both the Global Reporting Initiative (GRI) and the World Benchmarking Alliance (WBA). She offered webinar participants a unique global insight to the trajectory of sustainability reporting for investors, unpacked its particular relevance for New Zealand, and highlighted the key pitfalls for both asset-owners and issuers. Diplock has decades of experience in public service, financial regulation and standard-setting. She offered plenty of insights into the evolution of sustainability reporting – including framework convergence, the role of digitisation and why a sustainability lens matters for investors.
Watch the full recording below – and read on below for a summary of the conversation!
Holistic Value Creation: Why Sustainability Matters
Diplock opened by emphasising that “value creation over time…has to be seen in a holistic way” – not merely through a company’s balance sheet, but by integrating its impacts on people and planet alongside profit. Long-term investors, she argued, cannot ignore environmental and social externalities without risking mispriced assets or stranded investments. Conversely, short-term traders might capture momentary gains. She warned that those who “look at the current balance sheet in isolation” will be blindsided by the eventual fallout of unchecked ESG risks.
Convergence and Interoperability of Standards
When asked how the GRI’s double-materiality approach interacts with the International Sustainability Standards Board (ISSB) finance-focused lens, Diplock described a collaborative evolution rather than competition.
GRI captures both a company’s impacts on society and how sustainability issues affect the bottom line, whereas the ISSB zeroes in on those material factors that drive financial performance. From an NZSA perspective, it’s worth noting New Zealand’s current standards are aligned with the ISSB in this regard, with the purpose of the climate-related disclosure regime being the provision of information that describe the impact of environmental risks and opportunities on the strategy of a company. We do not operate a ‘double-materiality’ regualtory regime, although some of our largest companies use a GRI basis for their reporting to also report on their environmental impact.
Diplock noted that the current “alphabet soup” of standards would ultimately align by building “interoperability” between climate-focused and broader sustainability taxonomies—citing Singapore Exchange’s proposal for dual reporting under ISSB and GRI as a model for global alignment.
Digitisation as the Enabler
Diplock sees technology, particularly digital taxonomies and AI, as a linchpin that will transform onerous disclosures into streamlined, machine-readable data. That prediction is likely music to the ears of many New Zealand companies and directors who have been concerned at the investment of time, cost and capability in sustaianability reporting. Just as accounting went digital, Diplock believes that sustainability reports are poised for a similar style of standardisation, enabling real-time benchmarking and automated auditing.
“AI enhanced digitisation…will transform the way people both read and use the information that is reported by companies,” she predicted, arguing that smaller firms will ultimately benefit as much as large corporates once plug-and-play solutions become widespread.
Implications for New Zealand
Reflecting on New Zealand’s pioneering climate disclosure regime, Diplock praised the External Reporting Board’s willingness to adopt ISSB standards “with a sensible local slant,” while anticipating Australia’s parallel regime will incentivise further regional convergence. For Kiwi reporting entities, the focus should be on embedding transition plans within core strategy – not as standalone documents – so that investors can clearly trace how each business intends to decarbonise and adapt to a broader suite of enviornmental risks, including nature-related risks. This is an approach also championed by NZSA in its assessments.
Given the country’s exposure to uninsurable assets and agricultural impacts, Diplock predicts that robust nature-based disclosures will soon become as critical as greenhouse gas reporting.
Risk Management and Governance Red Flags
On greenwashing, Diplock warned investors to be wary of “too good to be true” narratives and encouraged active participation in shareholder meetings to probe management. She stressed that ethical, knowledgeable boards and audit committees are the first line of defence against misleading ESG claims. Likewise, investors should scrutinise the credibility of science-based targets and ask whether firms’ sustainability commitments are backed by transparent metrics and verifiable data.
Questions
Throughout the session, participants posed a number of questions:
- Individual Investor Updates: Diplock acknowledged the challenge for individual investors to keep pace with evolving frameworks, and recommended relying on trusted bodies – including NZSA and the External Reporting Board (XRB) – in addition to selective reading of standard-setter publications.
- New Zealand’s Global Alignment: Asked how NZ’s regime should evolve alongside ISSB and Australia’s forthcoming rules, she envisaged national standards “taking on these global standards…often with a local slant,” ensuring relevance without reinventing the wheel.
- Integration of Financial and Broader ESG Reports: On melding climate-focused disclosures with other sustainability metrics, Diplock recommended a portfolio-context approach: investors should assess each company’s resilience to physical, regulatory and transitional risks based on their time horizon and life stage.
Jane Diplock’s overarching message was one of cautious optimism: sustainability reporting is moving from voluntary ‘checklists’ to a unified, digital ecosystem that serves both investors and issuers. For New Zealand in particular, the task now is to embed these global frameworks into local practice, bolster governance to deter greenwashing, and harness technology to make ESG data as transparent and comparable as traditional financial statements. As the next wave of regulatory mandates and AI-driven tools arrives, boards and investors alike must stay agile—because in Diplock’s words, “the direction of travel is absolutely clear.”
Oliver Mander