Imposing climate law on the financial sector

NRGreport | 21.04.2021 12:17 PM

New Zealand will become the first country in the world to pass legislation requiring its financial firms to report on the consequences of climate change. The country wants to be carbon neutral by 2050, and the financial sector must also play its part in that.

Climate Change Minister James Shaw says banks, insurance companies and fund managers need to know the environmental impact of their investments.

This law highlights climate risks and resilience, which is very important in financial and business decisions Shaw said.

The law will apply to the country’s 200 largest companies and a number of foreign companies with assets of more than A$1 billion (US$703 million).

If we were the first in the world to introduce such a law, that would be real “leadership” and in this leadership role we would pave the way for other countries to make climate-related disclosure mandatory. David Clarke, New Zealand Minister of Commerce said.

The law forces financial companies to consider their environmental impact Evaluate not only their own investments, but also the companies they are lending to.

Although some companies have already begun to report on how climate change is affecting their business operations, strategies and financing, there is still a long way to go. Clark added.

They are expected to receive the first draft of the legislation this week.

The Law After it is adopted, companies must start reporting the impacts of climate change in 2023.

picture. Pixabay

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