Call it what you like but the recent Australian bush fires have put the topic of climate change front and centre around the world. The debate on whether it’s real or not has come and gone, the key question now is what are we all going to do about it?
It’s a question that should matter to anyone who is an investor.
The United Nations is concerned that climate change could have a significant impact on financial markets and also the value of stocks you are invested in. The longer the world goes without a safe trajectory on climate change, the greater the risks for investors of an abrupt policy response.
Financial markets look forward and price in future events, which means that share prices are likely to react before the real impacts of climate change are evident.
So, it should be of great public interest that the New Zealand Government, via the Ministry of Business, Innovation and Employment (MBIE), and the Ministry for the Environment put out a discussion paper late last year on Climate-related financial disclosures.
This came about from a recommendation from the Productivity Commission’s report in 2018 calling on the government to implement mandatory (on a "comply or explain" basis), principles-based, climate-related financial disclosures for listed companies. These would be included in company annual reports, making them accessible to the general public for listed companies and financial institutions that invest in them, like Mint Asset Management.
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