The archipelago said New Zealand would force banks to disclose the impact of their investments on climate change, making the archipelago the first country in the world to pass a law requiring the financial sector to be transparent in environmental matters.
Commerce Secretary David Clark indicated that under this law, banks, insurers and investment firms will be required to report the consequences of their investments on climate change.
“Being the first country in the world to introduce such a law means that we have the opportunity to show real leadership and pave the way for other countries to make the dissemination of climate information mandatory,” he declared.
Mr. Clark explained that this provision would oblige financial institutions to take into account the true impact of their investments on the climate and allow residents to assess them.
“It is important that every sector of the New Zealand economy helps us reduce carbon emissions and move to a lower emissions future,” he said.
“This legislation aims to ensure that financial institutions ultimately disclose and take action against the risks of climate change while seizing opportunities” available in this area.
The law was introduced on Monday, and if passed, reporting on climate issues will be mandatory by 2023.
Climate Change Minister James Shaw said these annual reports should highlight the fact that high-carbon investments will become less attractive as emissions-cutting measures become mandatory.
“We simply cannot achieve the carbon neutrality target for 2050 if the financial sector does not know the impact of its investments on the climate,” he said.
“This law will put climate risks at the center of financial and business decisions.”
Prime Minister Jacinda Ardern is committed to achieving New Zealand’s carbon neutral target for 2050 and producing all of its energy from renewable sources by 2035.