- September 27, 2021 4:09 PM
- April 30, 2020 9:20 AM
- September 28, 2020 3:41 AM
WELLINGTON-- New Zealand has become the first country in the world to introduce a law that requires the financial sector to disclose the impacts of climate change on their business and explain how they will manage climate-related risks and opportunities, Commerce and Consumer Affairs Minister David Clark announced on Tuesday.
The Financial Sector (Climate-related Disclosure and Other Matters) Amendment Bill has been introduced to Parliament and will receive its first reading this week.
This legislation ensures that financial organisations disclose and ultimately take action against climate-related risks and opportunities, the minister said.
"Becoming the first country in the world to introduce a law like this means we have an opportunity to show real leadership and pave the way for other countries to make climate-related disclosures mandatory."
Minister for Climate Change James Shaw said the law was another step towards a climate-friendly, prosperous future for New Zealand.
"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," said James Shaw.
The bill will make climate-related disclosures mandatory for around 200 organisations, including most listed issuers, large registered banks, licensed insurers and managers of investment schemes.
It requires the disclosures to be made in accordance with climate standards that will be issued by the External Reporting Board. Once passed, disclosures will be required for financial years commencing in 2022, meaning that the first disclosures will be made in 2023.
The Financial Markets Authority will be responsible for the independent monitoring and enforcement of the relevant reporting entities' compliance with the new reporting standards.