Leading the Fight against Climate Change – The role of Sustainable Finance

Jun 30, 2021

Sustainable finance offers solutions for climate goals

The long term economic risk of not fighting climate change is extreme, but long-term risks aren’t inherently a concern for traditional short-term investments. This means that most actors in the financial system have been incentivised to disregard the climate impacts of their short term investments. The result of this was decades of investment activity that not only failed to address climate change, but accelerated the problem.

New Zealand’s push for sustainable finance is also, then, a call for companies to consider the long term impacts of their short term endeavors.

New Zealand’s disclosure bill is set to realign investor perspectives

Starting in 2023, New Zealand’s largest companies will be required to disclose the impacts of their business on climate change and how they plan to navigate climate-related risks. By requiring major banks, insurers, and investment funds to do this, the government wouldn’t just be directly putting pressure on large institutions, but also seeking to empower small investors through transparency.

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