In a first, New Zealand brings in climate crisis law for financial firms

New Zealand has become the first country to introduce a law that will require banks, insurers and investment managers to report the impacts of the climate crisis on their business, minister for climate change James Shaw said on Tuesday.

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 netzero carbon emissions by 2050 unless the financial sector knows what impact their investments are having on the climate,” Shaw said. “This law will bring climate risks and resilience into the heart of financial and business decision making.”

The bill, which has been introduced to the country’s parliament and is expected to receive its first reading this week, requires financial firms to explain how they would manage climate-related risks and opportunities.

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.