Announced this week by minister for climate change James Shaw, the new rule is based on a “comply or explain” basis and will affect all financial businesses that have total assets or investments over $1 billion.
The rule means businesses meeting the criteria are required to make annual disclosures covering governance arrangements, risk management and strategies for mitigating climate change impacts.
The move makes NZ the first country in the world to require the disclosure as Australia, Canada, the UK, the EU and Japan all work on a disclosure framework.
“Many large businesses in New Zealand do not currently have a good understanding of how climate change will impact on what they do,” Shaw said.
“The changes I am announcing will bring climate risks and resilience into the heart of financial and business decision-making. It will ensure the disclosure of climate risk is clear, comprehensive and mainstream.”
Those entities captured by the requirements include large Crown financial institutions, ACC and the NZ Super Fund.
It also includes licensed insurers with over $1bn in total assets under management and will also require overseas organisations to disclose their policies under their NZ reports.
The disclosures will be required from 2023 at the earliest.
