In a world first, New Zealand will require all its biggest banks, insurance companies, and investment managers to report the climate impacts of their business activities.
“We simply cannot get to net-zero carbon emissions by 2050 unless the financial sector knows what impact their investments are having on the climate,” Minister of Climate Change James Shaw said in a statement. “This law will bring climate risks and resilience into the heart of financial and business decision making.”
The new rule, introduced last week, applies to banks with assets above NZ$1 billion, insurers with more than $1 billion under management, and all equity and debt issuers listed on the New Zealand stock exchange, Reuters reports. It’s expected to mandate disclosures from about 200 companies beginning with the 2022 business year, which means company reports will begin showing up in 2023.
The news goes back to New Zealand’s promise in September, 2000 to introduce mandatory climate risk reporting requirements based on the recommendations of the Task Force on Climate-related Risk Disclosures (TCFD). “New Zealand has made a leap in the right direction to safeguard its businesses and financial market for the future,” Michael Zimonyi, policy and external affairs director at the Climate Disclosure Standards Board, said at the time. “Now the real work begins of ensuring that businesses have the skills needed to implement these new requirements.”
Reuters notes that Prime Minister Jacinda Ardern has called the climate crisis the “nuclear-free moment of our generation”. Her government “has introduced several policies to lower emissions during its second term, including promising to make its public sector carbon-neutral by 2025 and buy only zero-emissions public transport buses from the middle of this decade,” the news agency writes.