New Zealand has become the first country in the world to introduce a law that requires financial institutions to report the impacts of climate change on their business.

Any bank or insurer worth over $703 million will need to report their findings, while all equity and debt issuers listed on the stock exchange will also need to make disclosures.

"Requiring the financial sector to disclose the impacts of climate change will help businesses identify the high-emitting activities that pose a risk to their future prosperity, as well as the opportunities presented by action on climate change and new low carbon technologies," said James Shaw, New Zealand’s climate change minister.

He said that the country would not be able to achieve net-zero carbon emissions by 2050 unless the financial sector knows what impact their investments are having on the climate.

“This law will bring climate risks and resilience into the heart of financial and business decision making,” added Shaw.

The legislation also forces financial companies to outline how they would address climate-related risks and opportunities.

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