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What is the News?
New Zealand Parliament has passed the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Bill. With this, New Zealand has become the first country in the world to have a climate-related disclosure law in place.
What is the purpose of the Bill?
The bill requires banks, insurers, firms and investment managers to report the impacts of climate change on their business.
The firms will
-assess their own investments and also evaluate the companies they are lending money to in terms of their environmental impact.
-will disclose how they would manage climate-related risks and opportunities.
These disclosures will be based on standards from New Zealand’s independent accounting body, the External Reporting Board (XRB).
These disclosures will become mandatory from 2023.
Who all will be covered under the bill?
About 200 of the largest financial firms in New Zealand, including banks with total assets of more than NZ$1 billion, large insurers and equity and debt issuers listed on the country’s stock exchange will have to make disclosures.
Several foreign firms that meet the NZ$1 billion thresholds will also come under the legislation.
Source: This post is based on the article “New Zealand passes climate change disclosure laws for financial firms in world first” published in Indian Express on 28th October 2021.
