SYDNEY (Reuters) – New Zealand has become the first country to introduce a law requiring banks, insurers and investment managers to report the effects of climate change on their business, Climate Change Minister James Shaw said on Tuesday.
All banks with a total assets of more than NZ $ 1 billion ($ 703 million), insurers with more than NZ $ 1 billion in total assets under management, and all shares and debt issuers listed on the country’s stock exchange will disclose must make.
“We simply cannot achieve net carbon emissions until 2050 unless the financial sector knows what impact their investments will have on the climate,” Shaw said in a statement.
“This law will bring climate risks and resilience to the core of financial and business decision-making.”
The bill, which was submitted to the country’s parliament and is expected to receive its first reading this week, requires financial firms to explain how they will manage climate-related risks and opportunities.
About 200 of the country’s largest companies and several foreign companies that meet the NZ $ 1 billion threshold will fall under the legislation.
Disclosure is required for fiscal years beginning next year once the law is passed, meaning the first reports in 2023 will be made by companies.
The government of New Zealand said in September last year that the financial sector should report on climate risks and those who cannot disclose will have to explain their reasons.
During the second term, the New Zealand government introduced a number of policies to reduce emissions, including making the pubic sector carbon neutral by 2025 and buying only public transport buses without exemption by the middle of this decade.
Prime Minister Jacinda Ardern, who was back in power last October and won the biggest election victory for her center-left Labor Party in half a century, called climate change the ‘nuclear-free moment of our generation’.
($ 1 = 1.4227 New Zealand dollars)
Reporting by Renju Jose in Sydney; Edited by Matthew Lewis