Sustainability-related investing

There are no specific regulations setting out sustainability-related investing requirements, but financial products with sustainability-related characteristics must meet the same standards as any other kind of financial product.

The fair dealing provisions in Part 2 of the Financial Markets Conduct Act 2013 (FMC Act) set out the standards of behaviour that those operating in the financial markets must comply with. These provisions include, but are not limited to, prohibitions on:

• misleading or deceptive conduct, including conduct that is likely to mislead or deceive;
• false, misleading or unsubstantiated representations;

Further information about our approach to fair dealing is available on the fair dealing page.

The prohibition on unsubstantiated representations does not apply to product disclosure statements (PDS), register entries, and other disclosure documents, which are instead governed by the Part 3 disclosure regime. The general prohibitions on misleading and deceptive conduct continue to apply. For further guidance see our offers of financial products.

Greenwashing is overstating or misrepresenting sustainability-related claims, making a product appear ‘greener’ or more socially responsible or sustainable than it is.

Greenhushing occurs when issuers deliberately limit or avoid public communication about their sustainability-related practices or characteristics, due to fear of scrutiny or uncertainty about regulatory expectations.

Both these practices pose a risk of misleading investors and damaging confidence in sustainable investment.  

Sustainability-related investing relies on trust, transparency and clear communication.

Investors should be able to clearly understand a product’s approach, risks and limitations. To support this, issuers must ensure all disclosures are fair, accurate and clear across every communication platform, including the PDS, Statement of Investment Policy and Objectives (SIPO), websites, marketing materials and reports.

Issuers should be familiar with the principles outlined in the FMA’s Sustainability-related disclosure guidance. This guidance applies to all products that incorporate sustainability-related considerations into their investment strategy, regardless of how they are advertised, described or marketed.

Key principles

1. Claims need to be clear

Use plain language and avoid vague or technical statements, and ensure the overall impression created is not misleading. Explain what the product is claiming to deliver, the approach you will take and how you will implement this – particularly where there are limitations to that approach.

2. Substantiate your claims

Be able to support sustainability‑related claims with evidence at the time the claim is made, rather than basing claims on unsupported opinions and/or assumptions that do not have reasonable grounds.

3. Messages need to be consistent

Ensure all sustainability‑related messaging is consistent, accurate, and not misleading across every platform. Use consistent terminology and tone across all communications, and prominently highlight any exceptions or qualifications. Keep links up to date.

4. Third-party involvement is effectively managed

Even when third-party services are used, responsibility remains with the issuer. Issuers need to ensure third-party services align with their own claimed practices and disclosures. Consider disclosing who third parties are. Where external assurance or certification is used, clearly explain the scope of the assurance and where investors can find more information.

For further information, refer to our Sustainability-related disclosure guidance.

The FMA monitors sustainability-related disclosures as part of our ongoing supervisory activities. We may take regulatory action where we are satisfied that:

• conduct or advertising is clearly misleading or deceptive; 
• disclosure is materially false or misleading, or likely to mislead;  
• advertising for products or services is likely to confuse investors; or  
• there is a material omission under the offer disclosure provisions.

We have a range of tools within financial markets legislation to influence better outcomes or hold firms to account. See our regulatory response guidelines for an overview of the range of regulatory responses and tools we may use in the course of our regulation.  

Since 2021, default KiwiSaver schemes must consider environmental, social and governance (ESG) factors and publish ESG policies. For more details, see the Government’s announcement: Default KiwiSaver changes support more responsible investment (beehive.govt.nz).

The FMA is responsible for monitoring providers’ compliance with these requirements. For more information, see the rules for each default KiwiSaver fund here: KiwiSaver Default Fund Instrument of Appointment – Exclusions 

Green, social, sustainability and sustainability-linked bonds (GSSS bonds) are fixed-income investments that fund sustainable projects such as wind farms or green buildings, or encourage issuers to meet sustainability performance targets such as carbon footprint reduction.

In response to market demand, we have granted a class exemption for certain GSSS bonds. This exemption allows GSSS bonds to be offered without full FMC Act Part 3 and Part 4 disclosure, on a similar policy basis to the same-class exclusion in clause 19 of Schedule 1 of the FMC Act. It applies where the GSSS bonds are of the same class as, and otherwise identical to, existing NZX-quoted bonds, but for a difference in GSSS status.

The exemption is subject to conditions requiring issuers to disclose prescribed key terms and GSSS-specific information to enable investors to readily understand the nature and features of the bond being offered.

Read the Financial Markets Conduct (Green, Social, Sustainability, and Sustainability-linked Bonds) Exemption Notice 2026 

CRD reporting standards outline how certain organisations, known as climate reporting entities (CREs), should inform stakeholders of the risks and opportunities they face related to climate change.

The FMA is the regulator of the CRD regime, which requires CREs to publish annual climate statements in accordance with Part 7A of the FMC Act and the Climate Standards issued by the External Reporting Board. Further details and guidance relating to CRD disclosure and reporting are available on our Climate reporting entities page.