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 for Business, Innovation and Employment (MBIE), and The Ministry for the Environment put out a discussion paper late last year on Climate-Related Financial Disclosures.
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.
In other words, they'd need to explain how they are taking into account the risks of climate change and what they are doing to mitigate their carbon footprint in the long term.
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