In world 1st, New Zealand introduces climate change law for finance sector
Sydney, Australia, Apr 13 (EFE).- New Zealand on Tuesday became the first country in the world to introduce a law that would require the country’s financial sector to report the impact of climate change on their businesses.
The law will also require banks, insurers and managers of investment schemes to explain how they will manage climate-related risks and opportunities.
“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. This law will bring climate risks and resilience into the heart of financial and business decision making,” Climate Change Minister James Shaw said in a joint statement with Commerce and Consumer Affairs Minister David Clark.
The Financial Sector (Climate-related Disclosure and Other Matters) Amendment Bill has been introduced to parliament, where Prime Minister Jacinda Ardern’s Labour Party has an absolute majority, and will require around 200 organizations to begin making the disclosures for the financial years starting in 2022, which means that they will present their first reports in 2023, according to the statement.
“Requiring the financial sector to disclose the impacts of climate change will help businesses identify the high-emitting activities that pose a risk to their future prosperity, as well as the opportunities presented by action on climate change and new low carbon technologies,” Shaw added.
The law will affect all registered banks, credit unions and building societies with total assets of more than NZ$1 billion ($701 million), as well as all managers of registered investment schemes with greater than NZ$1 billion in total assets under management.
Other entities required to make disclosures include licensed insurers with greater than NZ$1 billion in total assets under management or annual premium income greater than NZ$250 million, all equity and debt issuers listed on the country’s exchange and crown financial institutions with greater than NZ$1 billion in total assets under management.
New Zealand declared a climate emergency in December and pledged to achieve a carbon neutral government by 2050.
It has also promised a large-scale transition to electric vehicles so that more than half of the country’s car fleet is electric by 2035. EFE