New Zealand, financing must prove ready for the climate challenge

For some time now, banks and investors have been asked to increase transparency about the risks associated with climate change. New Zealand wants to enforce it by law.

“We cannot zero our net emissions by 2050 if the financial sector does not know the climate impact of its investments.” With these words, James Shaw, Minister of Climate Change, new ZelandAnd the Gifts A new law aims to “bring climate risk and resilience at the heart of financial decision-making and entrepreneurship.”

The impact of climate on the health of the financial sector

For some time there has been discussion about the need to ensure that banks and investment funds, insurance And other investors reveal the potential impact of weather changes On the other hand, the approach by which they intend to manage the risks and opportunities associated with the climate. New Zealand led Jacinda Ardern It is the first country in the world to impose this transparency through a law presented to Parliament in mid-April.

“It is important that every player in the New Zealand economy helps us reduce emissions and guide us towards a low carbon future,” explained David Clark, Minister for Trade and Consumer. He continues: “Some activities and some assets.”They will not keep their value In a low carbon world just because it pollutes so much and contributes to climate crisis. Likewise, there are technologies and activities that will help reduce emissions and therefore hold tremendous value.”

How does the new law introduced in New Zealand work

Once approved, the new law will be virtually implemented 200 organizations, including most listed issuers, major banks and investment managers. Thus, all of these subjects will be obligated to report on climate-related risks starting in the fiscal year beginning in 2022: in practice, they will publish the data the following year.

They will have to refer to the scheme he made الذي task force on climate financial disclosure (tcfd), which is considered the most reliable internationally. It was founded in 2015 by the Financial Stability Board of the Group of Twenty and chaired by Michael BloombergThis body includes 32 leading figures in economics and finance and published its guidelines in 2017. Since then, more than 1,500 organizations have officially expressed their support but in reality, Refers to the latest report published in 2020And the Little They have already posted correct and complete information. Among those analyzed, for example, only one in 15 gives the tools to assess whether their strategy is so flexible Facing different scenarios for increasing average global temperatures.