Crown financial institutions will be expected to report on their exposure to climate risk, according to Minister for Climate Change James Shaw.
In a statement, Shaw said the government expects Crown financial institutions to take into account the risks posed by the climate emergency, as well as the government’s steps to address these, in their investment decisions.
This, Shaw added, will lead to better allocation of public funds and support New Zealand’s efforts to transition into a low-carbon economy.
Last year, New Zealand announced it is planning to require climate risk reporting for certain large businesses and financial organisations. Crown financial institutions with over $1 billion in total assets under management, such as ACC and the NZ Super Fund, will be among those required.
On March 12, Minister of Finance Grant Robertson addressed letters of expectation to Crown financial institutions, giving effect to the announcement.
According to the letters of expectation, the firms’ climate reporting should adhere to the Task Force on Climate-related Financial Disclosures framework, which is widely acknowledged as international best practice.
“The Government is essentially asking Crown financial institutions to lead by example and demonstrate how accurate and timely reporting of climate risks can contribute to improve investment performance,” Shaw said. “This builds on the work we are doing to ensure the public sector is carbon neutral by 2025.”
