In world first, NZ to make banks report climate impact

New Zealand will force banks to reveal the impact their investments have on climate change under world-first legislation intended to make the financial sector’s environmental record transparent, officials said.

Commerce Minister David Clark said the law would make climate reporting mandatory for banks, insurance companies and investment firms.

“Becoming the first country in the world to introduce a law like this means we have an opportunity to pave the way for other countries to make climate-related disclosures mandatory.”

Clark said it would force financial institutions to consider the real-world impact their investments have on the climate.

“It is important that every part of New Zealand’s economy is helping us cut emissions and transition to a low-carbon future,” he said.

“This legislation ensures that financial organisations disclose and ultimately take action against climate-related risks and opportunities.”

The legislation was introduced on Monday and, if passed, will make climate reporting mandatory by 2023.

Climate Change Minister James Shaw said the annual reports were likely to underline the fact that high-carbon investments would become less attractive as measures to curb emissions took hold.