Financial sector to disclose climate impact
New Zealand has become the first country to introduce a law which requires the financial sector to disclose the impact of climate change on businesses and how they will manage climate-related risks and opportunities.
The legislation has been introduced to parliament and will receive its first reading this week.
Commerce and Consumer Affairs Minister David Clark said it was important that every part of NZ's economy was helping to cut emissions and transition to a low-carbon future.
"This legislation ensures that financial organisations disclose and ultimately take action against climate-related risks and opportunities," Dr Clark said.
"Becoming the first country in the world to introduce a law like this means we have an opportunity to show real leadership and pave the way for other countries to make climate-related disclosures mandatory."
Climate Change Minister James Shaw said the law was another step towards a climate-friendly, prosperous future for NZ.
"Climate change will have a profound impact on businesses all over NZ," Mr Shaw said.
"There are activities and assets that these businesses are involved in that will not hold their value in a low carbon world, simply because they emit too much climate pollution and contribute to the climate crisis.
"Similarly, there are technologies and activities that will cut emissions and become hugely valuable to the low carbon economy of the future.
"Requiring the financial sector to disclose the impacts of climate change will help businesses identify the high-emitting activities that pose a risk to their future prosperity, as well as the opportunities presented by action on climate change and new low carbon technologies."
The legislation will make climate-related disclosures mandatory for around 200 organisations, including most listed issuers, large registered banks, licensed insurers and managers of investment schemes.
Once passed, disclosures will be required for financial years starting in 2022, meaning that the first disclosures will be made in 2023.
Originally published as NZ financial sector to disclose climate impact