NZ Requires Financial Sectors to Report on Climate Risks

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NZ Requires Financial Sectors to Report on Climate Risks

A Climate Intelligence Platform will help businesses comply with this new mandate

Minister for Climate Change, James Shaw announced that  New Zealand would be the first country in the world to require the financial sectors to report on climate risks. The announcement was released on 15 September in the government’s official website (New Zealand first, 2020).

NZ Climate Measurement (2020) says, “Businesses covered by the requirements will have to make annual disclosures, covering governance arrangements, risk management and strategies for mitigating any climate change impacts.”

Mr Shaw says that “The changes I am announcing today will bring climate risks and resilience into the heart of financial and business decision making. It will ensure the disclosure of climate risk is clear, comprehensive, and mainstream (NZ Climate Measurement, 2020).

NZ Climate Measurement (2020) explains further:

  • This mandate will cover 200 organisations including large Crown Financial institutions, such as ACC and the NZ Super Fund, and all register banks, credit unions, and business societies with total assets of more than
    $1 billion.
  • Also, licensed insurers with more than $1 billion in total assets under management or with annual premium income greater than $250, the announcement says.
  • The $1 billion threshold will ensure that 90% of assets under management in New Zealand are included.

According to Mr Shaw, this announcement will be “another step on the journey this Government is taking towards a low carbon future for Aotearoa New Zealand and a cleaner, safer planet for future generations” (NZ Climate Measurement, 2020).

To help businesses comply with the government’s mandatory climate-related financial disclosure reporting, Tonkin + Taylor is proposing a platform for sharing the best practice of climate intelligence.

The platform will draw data on multiple models based on local, regional, and global climate and weather predictions. It can be initially used to forecast floods and drought but will eventually broaden its scope to include wider climate drivers (NZ Climate Measurement, 2020).

The national climate intelligence platform for improved forecasting and prediction of flood and drought will integrate five components: (1) climate change projections, (2) long-range (month annual) and seasonal climate outlook, (3) medium and short-range (weekly and daily) weather outlook, (4) integrated climate outlook, (5) climate risk assessment, (6) scenario-based options for decision making (NZ Climate Measurement, 2020).

“Understanding a foreseeable future would enable more informed decision making, allowing users the opportunity to put appropriate prevention in place” (NZ Climate Measurement, 2020).

To read the full government announcement and the Tonkin + Taylor report, click on the links below:

Source Citations:

New Zealand first in the world to require climate risk reporting. (15 September 2020). Beehive.govt.nz. Retrieved from https://www.beehive.govt.nz/release/new-zealand-first-world-require-climate-risk-reporting

NZ Climate Measurement Standards Initiative (CMSI): Seamless Integration for Foreseeable Future. (2020). Tonkin+Taylor. Retrieved from https://www.tonkintaylor.co.nz/media/1470/new-zealand-climate-measurement-standards-initiative.pdf

PHOTO CREDIT: The Auckland Viaduct by Karl Hipolito

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