New Zealand to Introduce Climate Change Law
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Banks, insurers and asset managers in New Zealand must make climate change-related disclosures for their businesses as New Zealand becomes a first-mover in green finance laws.
All banks with total assets of more than NZ$1 billion ($703 million), insurers with more than NZ$1 billion in assets under management alongside equity and debt issuers listed on the country’s stock exchange will have to make disclosures, according to the proposed law which will see its first reading this week.
Once the law is passed, the first disclosure reports will be released in 2023.
The move towards more climate change-related disclosures will make New Zealand the world’s first to introduce such a law.
Approximately 200 domestic firms and several foreign firms meet the NZ$1 billion thresholds to fall under the legislation.
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, said minister for climate change James Shaw said in a statement. This law will bring climate risks and resilience into the heart of financial and business decision-making.
Questions & Answers
Q.Which types of financial institutions will be affected by New Zealand’s new climate change law?
Which types of financial institutions will be affected by New Zealand’s new climate change law?
Banks, insurers, and asset managers will be affected. Also, equity and debt issuers listed on the country's stock exchange will also need to comply with the disclosure requirements.
Q.What is the financial threshold for firms to fall under the new climate change legislation?
What is the financial threshold for firms to fall under the new climate change legislation?
The threshold is NZ$1 billion. This applies to banks with total assets exceeding this amount and insurers with more than NZ$1 billion in assets under management.
Q.When are the first disclosure reports expected to be released under the new law?
When are the first disclosure reports expected to be released under the new law?
The first disclosure reports are expected to be released in 2023. This will happen once the proposed climate change law has been formally passed.
Q.Approximately how many firms will be subject to the new disclosure requirements?
Approximately how many firms will be subject to the new disclosure requirements?
Approximately 200 domestic firms will fall under the legislation. Several foreign firms that meet the NZ$1 billion asset thresholds will also be included.
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