New Zealand Introduces Bill Requiring Financial Firms to Disclose Climate Change Impacts

[Asia Economy Reporter Yujin Cho] New Zealand has become the first country in the world to introduce a bill requiring financial companies such as banks, insurance companies, and investment managers to disclose the impact of their corporate activities on climate change.

According to major foreign media on the 12th (local time), the New Zealand government has introduced a bill mandating banks and insurance companies with total assets exceeding 10 trillion won, as well as all stock and debt issuers listed on the stock exchange, to disclose the impact of their investments or businesses on climate change.

This bill will apply to about 200 domestic and foreign companies in New Zealand starting from the 2022 fiscal year.

James Shaw, New Zealand's Minister for Climate Change, stated in a press release that day, "We have become the first country to introduce a bill requiring the financial sector to report on climate change impacts," emphasizing, "If we do not understand the impact of financial sector investments on the climate, we will not be able to achieve the 2050 carbon zero emissions target."

He added, "This bill will place climate risks at the core of financial and corporate decision-making."

Meanwhile, in Wall Street, USA, movements to reflect climate change risks in corporate evaluations are spreading. Recently, companies related to investment analysis and financial services in Wall Street have introduced a new risk indicator called 'climate resiliency,' which quantifies the sensitivity of climate change on corporate profits and losses.

This aims to analyze the impact of climate change on corporate activities from physical, economic, and reputational aspects, and the efforts companies make to mitigate these risks, reflecting them in corporate value assessments.

A Wall Street fund manager explained, "We are incorporating the extent to which the physical locations of tangible assets such as land, buildings, and machinery owned by companies are exposed to climate change risks as an evaluation factor in corporate assessments."