New Zealand introduces world-first climate risk reporting bill for banks
New Zealand is set to become the first country in the world to legally require its banks, insurers, and asset managers to report on the climate risk of their investments.
Minister for Climate Change, James Shaw, said New Zealand “simply cannot get to net-zero carbon emissions by 2050 unless the financial sector knows what impact their investments are having on the climate”.
In addition to the 2050 goal, New Zealand’s Prime Minister, Jacinda Ardern, has also committed the country to generating all energy from renewable sources by 2035.
Introduced to New Zealand on Monday, the new climate risk reporting legislation – if passed – will make the reports by banks and other financial firms mandatory by 2023. This means firms beginning their records on for the financial year beginning 2022.
The proposed law will receive a first reading this week, according to the first reports on the bill by Aljazeera.
The bill will cover all banks and insurers with total assets topping NZD 1 billion ($703 million). As well as all equity and debt issuers listed on the country’s stock exchange.
Such scope covers some 200 of New Zealand’s largest companies.
“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,” the country’s Commerce Minister, David Clark, said.
“This legislation ensures that financial organisations disclose and ultimately take action against climate-related risks and opportunities.”