New Zealand passes climate change disclosure laws for financial firms in world first

Several foreign firms that meet the NZ$1 billion threshold – including Australia’s four largest banks: Commonwealth Bank of Australia, Australia and New Zealand Banking Group, Westpac Corp and National Australia Bank – will also come under the legislation.

“New Zealand is a world-leader in this area and … we have an opportunity to pave the way for other countries to make climate-related disclosures mandatory,” minister for climate change James Shaw said in a statement.

The new laws will require financial firms to explain how they would manage climate-related risks and opportunities, and the disclosure requirements will be based on standards from New Zealand’s independent accounting body the External Reporting Board (XRB).

Those standards will be based on the Task Force on Climate-related Financial Disclosures (TCFD), and the disclosures will become mandatory for financial years beginning in 2023.

The New Zealand government has introduced several policies to lower emissions during its second term including promising to make its public sector carbon-neutral by 2025 and buy only zero-emissions public transport buses from the middle of this decade.