New Zealand has passed a law requiring financial institutions to disclose and act on the risks and impacts of climate change in their business, a "world first", the government says.
Nearly 200 of New Zealand's largest financial market participants will need to disclose clear, consistent and comparable information about the risks and opportunities that climate change presents to their businesses, according to a statement by New Zealand Trade Minister David Clark.
The Minister of Commerce considered that the law would increase the degree of certainty in the business sector, raise expectations, accelerate progress and create a level playing field for activity.
The law includes banking institutions, with total assets of more than one billion New Zealand dollars, which is equivalent to 718.90 million dollars, according to "Euronews".
Climate Change Minister James Shaw noted in a statement that the legislation makes New Zealand "the first country in the world to introduce mandatory climate reporting for the financial sector." He added that New Zealand had "an opportunity to pave the way for other countries to make climate-related disclosures mandatory".
The Act will require disclosures for fiscal years, beginning in 2023, subject to publication of climate standards from New Zealand's independent accounting standard setter, the External Reporting Board.
The government of Prime Minister Jacinda Ardern has committed to a series of policies aimed at tackling climate change and reducing emissions, including making the public sector carbon neutral by 2025.