SYDNEY (Reuters) – New Zealand has become the first country to introduce a law that would require banks, insurers and investment managers to report on the impact of climate change on their business, Climate Minister James Shaw said on Tuesday.
All banks with a total asset of more than $ 1 billion ($ 703 million), insurers with more than $ 1 billion of total managed assets, and all issuers of shares and debts listed on the country̵
“We just can’t get to zero carbon emissions by 2050 unless the financial sector knows what impact their investments are having on the climate,” Shaw said in a statement.
“This law will put climate risks and sustainability at the heart 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 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 New Zealand $ 1 billion threshold will fall under the law.
Disclosure will be required for the financial years beginning next year after the law is passed, which means that the first reports will be prepared by the companies in 2023.
The New Zealand government said last September that it would prepare a financial sector report on climate risks and those who could not disclose would have to explain their reasons.
The New Zealand government has introduced several emission reduction policies in its second term, including promising to make its public sector carbon-neutral by 2025 and to buy only zero-emission public transport buses from the middle of this decade.
Prime Minister Jacinda Ardern, who returned to power in October last year securing the biggest election victory for her center-left Labor Party in half a century, called climate change “free of a nuclear moment for our generation”.
($ 1 = 1.4227 New Zealand dollars)
Report by Renju Jose in Sydney; Edited by Matthew Lewis