SYDNEY (Reuters) – New Zealand has become the first country to introduce a law that will require banks, insurers and investment managers to report on the impacts of climate change on their businesses, the minister said on Tuesday. Climate change James Shaw.
All banks with total assets in excess of US $ 1 billion (US $ 703 million), insurers with more than US $ 1 billion in assets under management and all issuers of equity and debt listed on the country’s stock exchange will have to make disclosures.
“We simply cannot reach net carbon emissions by 2050 unless the financial sector knows what impact its investments have on the climate,” Shaw said in a statement.
“This law will bring climate risks and resilience to the heart of financial and business decision-making.”
The bill, which has been tabled in the country’s parliament and is expected to receive its first reading this week, requires financial companies to explain how they would manage climate-related risks and opportunities.
About 200 of the country’s largest companies and several foreign companies that meet the US $ 1 billion threshold will be under the legislation.
Disclosures will be needed for fiscal years beginning next year once the law is passed, meaning the first information will be provided by companies in 2023.
The New Zealand government last September said it would present the financial sector report on climate risks and those who could not disclose should explain their reasons.
The New Zealand government has introduced several policies to reduce emissions during its second term, including the promise to make its public sector carbon neutral by 2025 and to buy only zero-emission public transport buses from this decade.
Prime Minister Jacinda Ardern, who returned to power last October with the biggest election victory of her center-left Labor party in half a century, had called climate change the “free moment of our nuclear generation”.
($ 1 = $ 1,4227)
Report by Renju Jose in Sydney; Edited by Matthew Lewis