Banks will report climate impacts, according to New Zealand law

The law is to affect banks and insurance companies whose assets exceed one billion New Zealand dollars (roughly 715 US dollars), and investment managers whose portfolios are listed on the local stock exchange. The new rules will thus directly affect about 200 companies, but they will also affect companies to whom financial companies lend money or provide investments. The bill was introduced on Tuesday by James Shaw, the local minister for climate change (which actually exists, and the New Zealanders also have an environment minister), who is also the leader of the local Green Party. The legislation should pass parliamentary first reading this week. According to Shaw, carbon neutrality cannot be achieved without the involvement of banks, insurance companies and investment funds. "We cannot simply get to zero carbon emissions by 2050 if the financial sector does not know what impact its investments have on the climate," Shaw said. The bill requires financial companies to report annually on how they manage the risks associated with climate change and how opportunities are seen in this regard, the BBC writes. If the legislation passes, companies will start publishing this information in 2023. "The law brings climate risk and environmental resilience to the heart of financial and business decisions," Shaw said. In an effort to enforce the law, which will be the first of its kind, it is not alone. The New Zealand Ministry of Climate Change has the support of the local Department of Commerce, headed by David Clark. According to him, the country should lead by example.