New Zealand on Tuesday became the first country that has introduced the climate change law, requiring the country’s financial sector to report the impact of climate change on their businesses.
Under the law, banks, insurers, and managers of investment schemes were required to explain how they will manage climate-related risks and opportunities.
Climate Change Minister James Shaw and Commerce and Consumer Affairs Minister David Clark said in a joint statement that the law will bring climate risks and “resilience into the heart of financial and business decision making.”
“We simply cannot get to net-zero carbon emissions by 2050 unless the financial sector knows what impact their investments are having on the climate,” Shaw added.
He also said that requiring the financial sector to disclose the impacts of climate change will help businesses identify the “high-emitting activities” that pose a risk to their future prosperity.
In December 2020, New Zealand declared a climate emergency and pledged to achieve a carbon-neutral government by 2050.
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