New Zealand has become the first country to introduce a law that will require banks, insurers and investment managers to report the impacts of climate change on their business, Minister for Climate Change James Shaw said on Tuesday.
It is to be noted that New Zealand s also among those countries which have a Minister for Climate Change. Countries like India and China need to install this ministry and all industrial and other ventures need to get passed by it.
According to the new bill, all banks with total assets of more than NZ$1 billion ($703 million), insurers with more than NZ$1 billion in total assets under management, and all equity and debt issuers listed on the country's stock exchange will have to make disclosures.
"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," Shaw said in a statement. "This law will bring climate risks and resilience into the heart of financial and business decision making."
Around 200 of the country's biggest companies and several foreign firms that meet the NZ$1 billion threshold will come under the legislation. Disclosures will be required for financial years beginning next year once the law is passed, meaning that the first reports will be made by companies in 2023.
The New Zealand government last September said it would make the financial sector report on climate risks and those unable to disclose would have to explain their reasons.
New Zealand's greenhouse gas emissions have been on the increase. Between 1990 and 2017, New Zealand's gross emissions (excluding removals from land use and forestry) increased by 23.1%. When the uptake of carbon dioxide by forests (sequestration) is taken into account, net emissions (including removals from land use and forestry) have also risen – by 64.9% since 1990.
The New Zealand government has introduced several policies 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.