NZ passes world-first climate reporting legislation

The Government says New Zealand has become the first country in the world to pass a law that will ensure financial organisations disclose and ultimately act on climate-related risks and opportunities.

The Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill has now passed its third reading. Once in effect, it is expected to make a significant contribution to New Zealand achieving carbon neutrality by 2050.

Climate Change Minister James Shaw said the legislation was one of a number of actions the Government is taking to meet its international obligations and achieve the 2050 emissions targets required by the Climate Change Response Act 2002.

The XRB’s climate standards will be based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) on Governance, Risk Management, Strategy, and Metrics and Targets. The recommendations are widely acknowledged as international best practice.

The XRB released its first consultation document focussing on Governance and Risk Management for the proposed climate-related disclosure reporting standards on 20 October 2021. Consultation on standards for the Strategy, and Metrics and Targets will follow.