NEW ZEALAND Law and Practice Contributed by: Graeme Quigley, Ashton Goatley and Erin Hickey, Webb Henderson
Directors/Officers ). This review is expected to commence in 2025. Over the last year, there has also been an observ - able increase in shareholder activism relating to the governance and performance of New Zea - land publicly listed companies, including NZME, Vista Group and Fletcher Building, in addition to wider activism related to ESG factors (see 2.2 ESG Considerations ). 2.2 ESG Considerations In February 2024, the Supreme Court released its decision in Smith v Fonterra & Ors [2024] NZSC 5, declining to strike out a claim against a group of substantial New Zealand businesses. The claim was framed in terms of the existing rec - ognised torts of public nuisance and negligence, and a proposed novel tort of “climate system damage” . The Supreme Court held that the claim under public nuisance was not “bound to fail” and should not be struck out, meaning that the matter may now proceed to a substantive hear - ing. The causes of action in negligence and “cli- mate system damage” were consequently also not struck out, on the basis that to do so would not achieve “material saving in hearing time or other court resources” . In April 2025, the High Court declined an application by the defendants to join other greenhouse gas emitters to the pro - ceedings, which the defendants had sought on the basis that their emissions had only an infini - tesimal impact on global climate change. The Smith proceedings are in keeping with the international trend of climate litigation against corporates. Three high-profile international examples of this are Milieudefensie, v Shell, City of Chicago v BP and Notre Affaire à Tous and others v BNP Paribas.
The Corporate Governance Code and the NZX’s ESG Guidance Note place greater emphasis on ESG factors and clarity of reporting by listed issuers on such matters. The Corporate Govern - ance Code features a recommendation that issu - ers provide non-financial disclosures (including in relation to “environmental, social sustainability and governance factors and practices” ) at least annually, and supports the use of recognised international reporting initiatives for this purpose where appropriate to the company’s scale. The Listing Rules also specify that annual reports of NZX-listed entities must contain either: • a copy of climate statements prepared by the entity in accordance with the requirements of the Financial Markets Conduct Act 2013; or • the address of, or a link to, the website where a copy of those statements can be accessed. In addition, a range of regulatory inquiries in New Zealand and Australia over recent years have emphasised the importance of institutional culture in mitigating the risk of misconduct or undesirable outcomes for consumers, namely: • the Australian Royal Commission into Mis - conduct in the Banking, Superannuation and Financial Services Industry; • the Australian Prudential Regulation Authority (APRA)’s Prudential Inquiry into the Common - wealth Bank of Australia; and • the Financial Markets Authority and the Reserve Bank of New Zealand’s joint review of the conduct and culture in New Zealand banks and the insurance industry, which has resulted in the introduction of a new licensing regime relating to “conduct of financial institu - tions” . The reports from these inquiries emphasised that boards of directors are expected to take owner -
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