An official New Zealand Government website reported on 15 September that New Zealand will be the first country in the world to require the financial sector to report on climate risks. It is said that the new regime will be on a comply-or-explain basis, based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, which is widely acknowledged as international best practice. Businesses covered by the requirements will have to make annual disclosures, covering governance arrangements, risk management and strategies for mitigating any climate change impacts. If businesses are unable to disclose, they must explain why. The new climate reporting requirements will apply to:
- All registered banks, credit unions, and building societies with total assets of more than $1 billion
- All managers of registered investment schemes with greater than $1 billion in total assets under management
- All licensed insurers with greater than $1 billion in total assets under management or annual premium income greater than $250 million
- All equity and debt issuers listed on the NZX
- Crown financial institutions with greater than $1 billion in total assets under management, such as ACC and the NZ Super Fund
Overseas incorporated organisations would also be required to disclose in their New Zealand annual reporting.