New Zealand has become the first country to make it mandatory for financial firms to do climate risk reporting. This legislation requires banks, insurers, and asset managers to disclose the impacts of climate change on their businesses.
New Zealand is trying to slash its carbon emissions for its goal to become carbon neutral by 2050. They believe, net-zero carbon emissions cannot be achieved unless the financial sector knows the impacts of their investments on climate. So they want financial sector needs to play its part.
Commerce Minister David Clark said, “It is important that every part of New Zealand’s economy is helping us cut emissions and transition to a low-carbon future,”
“This legislation ensures that financial organizations disclose and ultimately take action against climate-related risks and opportunities.”
It would require climate-related disclosures mandatory for around 200 organizations. This legislation was introduced on Monday and if passed will make climate reporting mandatory by 2023.
James Shaw, Climate Change Minister said, “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.”
