Sustainability reporting is the term we use to describe reporting which describes the economic, environmental, social, and cultural impacts of an entity's activities.
The Sustainability Reporting Board has delegated authority from the XRB Board to issue non-binding guidance that relates to non-financial reporting.
In 5 September 2020, the Government extended the XRB’s mandate to include the development and issuance of mandatory Climate Related Financial Disclosures for specified entities, and the ability to issue development of non binding (voluntary) guidance on non-financial reporting. Additionally, there are growing calls from users of reporting information – such as investors, shareholders and customers – for entities to disclose information that extends what is included in traditional financial reporting frameworks. This broader information includes things like an entities impact on communities and the environment.
Under our non-financial reporting extended mandate, we have decided to begin at the framework level, to ensure the work is connected and holistic.
Traditional financial reporting frameworks can limit the ability for entities to demonstrate value and impact beyond monetary perspectives. As New Zealand’s standard setter, we want to respond to this by developing a voluntary reporting framework that will increase transparency and provide entities with a consistent and comparable way of reporting non-financial matters.
A non-financial reporting framework has the potential to create immense value for reporting entities and their shareholders. This includes:
Better information for decision-making and/or allocating resources
Attracting investment
Maintaining a social licence to operate
We initially partnered with PwC to scope and plan the work. During this phase of the work the project was given its name - Ngā pou o te kawa ora, which refers to the pillars that are the principles of life.
Māori entities generally apply a holistic approach to their decision making and reporting, which reflects the interconnectedness of people, environment, and spirituality. For this reason, our work to develop a voluntary non- financial reporting framework has initially focused on engaging with Māori to understand how a mātauranga Māori approach could benefit the development of this framework.
Over the following 12 months we conducted a series of regional wānanga. This enabled us to identify core elements of the reporting framework relevant to Māori reporting entities, this process involved engagement with 50 Māori entities and over 80 individuals from July 2022 through to June 2023.
Following this, we were able to construct the core components of a draft framework, currently titled He Tauira.
The draft framework was then reviewed and tested by a select group of technical advisors representative of a range of Māori entities, whakapapa, corporate background, disciplines, and geographies. The feedback from the technical advisors was incorporated into He Tauira.
The draft framework is now being trialled with 11 Māori reporting entities.
An interim report on the trial's progress will be published by mid-2025. Following that, we will release the draft framework for feedback from a broader range of stakeholders.
The XRB intends for this framework to be available for all entities in Aotearoa New Zealand to voluntarily adopt and apply.
He Tauira is a voluntary non-financial reporting framework. It is designed to help a reporting entity share the stories of the value it creates in a meaningful way for its hunga whaipānga (stakeholders) (see below). It aims to provide a process for an entity to explain how it links its identity and purpose to its decision making, and to then report on its progress towards achieving its aspirations over the short and long term. The tikanga within He Tauira assist in managing the reporting output.
The following illustrates the key components of He Tauira.
He Wharenui (meeting house) is the central metaphor of He Tauira. The main elements of the wharenui are used as a conceptual metaphor for the elements of reporting. An entity applies the elements of He Wharenui to its purpose, identity and activities.
It contains two additional concepts – hunga whaipānga and tikanga – to guide the entity when considering who the reporting is for and how to manage reporting content.
The video illustrates the key components of He Wharenui, which are explained below.
Hunga whaipānga
The term ‘hunga whaipānga’ is intended to encompass all human and non-human parties who have direct or indirect rights or interests in a specific endeavour, decision, or undertaking by the reporting entity, or are otherwise impacted by the activities of an entity.
Tikanga | Holistic principles
The tikanga of He Tauira were chosen to assist in managing the reporting output. They are intended to guide and direct the thought process when an entity reports using He Tauira.
Tika and pono – Tika represents the concept of righteousness, justice, and fairness, emphasising acting with integrity, honesty, and ethical conduct in all aspects of life. Pono refers to truthfulness, sincerity, and authenticity, involving being genuine, honest, and sincere in thoughts, words, and actions.
Whaitake – a topic or piece of information is whaitake if it holds substance to the hunga whaipānga.
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Tūāpapa | The foundation Represents continuous connection with Papatūānuku offering stability, grounding, and a profound interconnectedness with all elements of life, as emphasised by the concept of tauutuutu. |
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Tāhuhu | Aspiration and vision Tāhuhu, acts structurally as the ridgepole on the roof of He Wharenui. It acts as the crown of the wharenui, reaching towards the heavens and embodying the aspirations and dreams of the entity. The tāhuhu is connected to the tūāpapa through the mauri that flows into the interconnected pou tokomanawa.
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E rima ngā pou | Five focus areas Pou Tokomanawa are the critical pillars that connect Papatūānuku (encapsulated in the tūāpapa) and Ranginui (encapsulated in the tāhuhu). The pou tokomanawa represent core elements that each entity must reflect upon, and which together, provide for achievement of positive and sustainable intergenerational impact. Each entity makes these focus areas meaningful in its own way. They are:
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Wāhi | Spaces to transition The role of the wāhi is to provide a space for the entity to articulate its current position, anticipated challenges, and the transition it is undergoing to reach the entity’s aspirations and desired outcomes. |
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Poupou | Supporting elements The poupou offer a dynamic aspect, allowing for flexibility and adaptability for the entity. Poupou are additional supporting pillars, providing entities with a customisable space to express their kaupapa, stories, and values. |
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