New Zealand is set to become the first country in the world to introduce a law that would subject financial firms to climate reporting.

In a world’s first, New Zealand will make its banks, insurers and investment managers with total assets of more than NZ$1 billion (US$703 million) to report climate change impacts on their businesses.  

The law, which has been introduced to the New Zealand Parliament and is expected to receive its first reading soon, will require banks, insurance firms and investment managers to make disclosures on the impacts of climate change on their business and how they plan to navigate climate-related risks. 

It follows growing pressure on the banking and financial sector to ramp up their efforts to fight climate change and take accountability for their role in driving the crisis. 

Under the NZ$1 billion threshold the law sets, around 200 of the country’s largest companies as well as several overseas firms will be subject to the new legislation.

New Zealand’s commerce and consumer affairs minister David Clark, said: “Becoming the first country in the world to introduce a law like this means we have an opportunity to show real leadership and pave the way for other countries to make climate-related disclosures mandatory.”

Once the law is passed, disclosures will be required as of 2023. 

Rosa Medea is Life & Soul Magazine’s Chief. She writes about lifestyle including sustainable and green living.