Tuesday, September 15, 2020

Climate Change: Disclosure

The government will finally be requiring large New Zealand companies to disclose their climate change risks:

New Zealand finance companies will be made to report on climate change risk, Climate Change Minister James Shaw has announced.

The policy will force around 200 large financial organisations in New Zealand to disclose how exposed their business and investments are to climate-change related risk.

Any bank, credit union, building society, investment scheme, insurer, or Crown Financial Institution with more than $1b in assets will be required to either disclose this risk or explain why it has not.

These 200 or so institutions will cover 90 per cent of the assets controlled in New Zealand, and includes large crown investors like ACC and the NZ Super Fund.

Its a good, if minor policy - partly because it will help make these companies aware themselves of the risks they face, and therefore get them taking steps to manage it, and partly because it will let investors in those companies do the same. And the result should be direct financial pressure to reduce climate change risks by reducing emissions, divesting from polluters, and moving facilities away from at-risk areas. Obviously, its not sufficient, but its a good backing for the ETS.