Disclosure could soon become law
Listed New Zealand companies could soon be required by law to make any climate change-related risks to their businesses known to their shareholders.
Climate Change Minister James Shaw will today announce plans to introduce legislation to Parliament that would make climate-change disclosures for businesses a legal requirement.
But it is not, however, likely to pass before next year’s election, meaning it could still yet be torpedoed by a National government if it does not like the legislation.
Shaw said the law, if passed, would mean companies would be required to assess and report on any of their climate-related financial risks to shareholders.
For example, if an airport was built on a waterfront that would likely be affected by climate-change-induced sea-level rises, the company that owns the airport would have to provide appropriate information to its owners.
Shaw said the piece of work was important as climate change posed a financial risk to a large number of businesses across the country.
“The ability for businesses to understand these risks and therefore act upon them will assist New Zealand’s long-term transition to a lowemissions country.”
Shaw is not alone in his calls for tighter climate change regulations for businesses.
The Insurance Council of New Zealand, Z Energy and Meridian Energy have all suggested a mandatory regime.
Shaw said that in the future, better provision of information will enable financial markets to effectively price in climate change risks and help to safeguard New Zealand’s financial stability.
The Government will this afternoon launch discussion papers on the proposal at the Sustainable Finance Forum in Auckland.
In other countries — such as Australia, the United Kingdom and Japan — governments have been following the Task Force on Climate-related Financial Disclosures ( TCFD) framework.
“New Zealand needs to be in step with these international trends to ensure we are best prepared for climate change, so we are leaving the most stable environment for our kids and grandkids possible,” Shaw said.