The Government plans to pass a law requiring companies to disclose climate-change risks
Climate Change Minister James Shaw will later today announce that he plans to introduce legislation to Parliament to make climate-change disclosures law. Photo / Dean Purcell Listed New Zealand companies could soon be required by law to make any climate change-related risks to their businesses known to their shareholders. Climate Change Minister James Shaw will later today announce that he plans to introduce legislation to Parliament to make climate-change disclosures for businesses a legal requirement. But it is not, however, likely to pass before next year's election, meaning it could still yet be torpedoed by a National government if it does not like the legislation. READ MORE: One billion at risk: How climate change is transforming our oceans and mountains Climate change test: How much do you know? Climate change: How hard will extreme weather hit NZ? Premium - Herald podcast: Why we can't risk normalising climate change And any final legislation still needs to go through Cabinet, meaning it would need New Zealand First's seal of approval before it went to the House. Shaw said the law, if passed, would mean companies would be required to assess and report on any of their climate-related financial risks to shareholders. For example, if an airport was built on a waterfront which would likely be affected by climate-change-induced sea level rises, the company that owns the airport would be required to provide appropriate information to its owners. The law would also mean companies would have to disclose any risk of stranded assets assets that may suffer from unexpected value write-downs as a result of climate change to their shareholders. For example, shareholders would need to be informed that an investment in a coal mine could lose them money, given the Government's policies to move to 100 per cent renewable energy. Shaw said this piece of work is important as climate change poses a financial risk to a large number of businesses across the country. "The ability for businesses to understand these risks and therefore act upon them will assist New Zealand's long-term transition to a low-emissions country." And Shaw is not alone in his calls for tighter climate change regulations for businesses. The Insurance Council of New Zealand, Z Energy and Meridian Energy have all suggested a mandatory regime be put in place. Shaw said that in the future, better provision of information will enable financial markets to effectively price in climate change risks and help to safeguard New Zealand's financial stability. The Government will this afternoon launch discussion papers on this proposal at the Sustainable Finance Forum in Auckland. In other countries in the world such as Australia, the UK and Japan Governments have been following the Task Force on Climate-related Financial Disclosures (TCFD) framework. "New Zealand needs to be in step with these international trends to ensure we are best prepared for climate change, so we are leaving the most stable environment for our kids and grandkids possible," Shaw said. OPINION: Momentum is on the rise, but plenty more to do.