World’s First Climate Change Reporting Law Introduced

15 April 2021

New Zealand has introduced a bill in parliament that will require banks, insurers, and investment managers to report the impact of climate change on their businesses. The proposed law is the first of its kind, but will surely not be the last. 

New Zealand’s move breaks new ground in the fight against climate change. Regulators in Europe and the US have taken steps to require the financial sector to quantify, report on, and ultimately address the systemic risks posed by climate change, but New Zealand will be the first country in the world to make this requirement a law.

Banks and insurers with NZ$1 billion in assets under management (approx. US$700 million), and all of the equity and debt issuers listed on the country’s stock exchange, approximately 200 companies in all, will be subject to the law once it takes effect. The law will also apply to local subsidiaries of multinational corporations.

Gro’s suite of climate apps and climate indices enable users to precisely measure climate risk for a given industry (real estate, retail, agriculture, mining, energy, etc.), company, or supply chain in order to improve both strategy and capital allocation, and ultimately make financial systems more resilient in the face of climate change.  

Firms will be required to file their first reports in 2023. Final reporting standards will be developed in line with the recommendations of the international Task Force on Climate-related Financial Disclosures (TCFD).

New Zealand’s historic legislation is the clearest possible confirmation that rigorous, usable data is now available to enable financial firms to conduct a clear and complete assessment of climate risk. This is a critical and necessary first step to managing the risks that climate change will bring to a wide range of industries.

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