New Zealand passes climate change disclosure laws for insurers & banks

New Zealand passes climate change disclosure laws for insurers & banks

New Zealand has passed climate change disclosure laws for insurers and banks. The new laws require banks, insurers, and investment managers to report the impacts of climate change on their businesses.

This was disclosed on Thursday by officials of New Zealand.

What the Climate change disclosure laws mean

In New Zealand, the largest financial firms including banks with total assets of more than NZ$1 billion ($718.90 million), large insurers, and equity and debt issuers listed on the country’s stock exchange will now have to make disclosures on the impact of climate change on their business.

Financial firms with this new law will now be required to explain how they would manage climate-related risks and opportunities.

The disclosure requirements will be based on standards from New Zealand’s independent accounting body, known as the External Reporting Board (XRB).

Those standards will be based on the Task Force on Climate-related Financial Disclosures (TCFD), and the disclosures will become mandatory for financial years beginning in 2023.

This new legislation also covers foreign firms that meet the NZ$1 billion threshold such as Australia’s four largest banks: Commonwealth Bank of Australia, Australia and New Zealand Banking Group, Westpac Corp., and National Australia Bank.

James Shaw, New Zealand’s minister for climate change in a statement said, “New Zealand is a world-leader in this area and … we have an opportunity to pave the way for other countries to make climate-related disclosures mandatory.”

There have been several policies introduced by the New Zealand government 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.

New Zealand with this, now becomes the first country to pass a climate change law. The current government has been at the fore on issues around climate change.

Author: Greg