New Zealand makes climate reporting compulsory for large financial institutions
"New Zealand makes climate reporting compulsory", 15 September 2020
New Zealand has become the first country in the world to make climate risk reporting mandatory for banks, asset managers and insurers.
Under new legislation [...] large financial institutions would be required to report annually on governance, risk management and strategies for mitigating climate change impacts.
The country's Minister for Climate Change, James Shaw, said the mandatory disclosure requirements, which are based on the Task Force on Climate-Related Disclosure (TCFD) framework, would be the first of their kind in the world.
“Australia, Canada, UK, France, Japan, and the European Union are all working towards some form of climate risk reporting for companies, but New Zealand is moving ahead of them by making disclosures about climate risk mandatory across the financial system,” he said.
The requirement will apply to around 200 institutions, including banks and institutional investors with more than $NZ1 billion ($920 million) in assets, and insurers with either $1 billion in assets or annual premium income of more than $NZ250 million. The new regime requires parliamentary approval and would not come into force until 2023.
Green finance groups welcomed Tuesday's announcement.
While Australia is yet to mandate specific climate risk reporting, the Australian Prudential Regulation Authority has told financial institutions it expects them to report on the risks under existing prudential rules. It has endorsed the use of the TCFD framework.
Australia's major banks and insurers have taken this seriously, joining forces with climate scientists to create the Climate Measurement Standards Initiative.
[...] CMSI published the nation's first comprehensive climate change reporting framework.