New Zealand may be among the first countries to follow France in requiring institutional investors to report climate change-related indicators.
Matt Christensen, AXA Investment Managers’ global investment chief, said that New Zealand, Australia and Canada could be the first countries outside the European Union to introduce the requirement pioneered by France, according to a BusinessDesk
Christensen said at an Auckland responsible investment event last week the French law could take another two years to be adopted widely across Europe. The investment veteran said it’s natural to think legislation akin to France’s new law may be adopted by countries like New Zealand. Nonetheless, it would require a less “investment-type approach” to fiduciary duty to investors, the report noted.
In January this year, France’s law on Energy Transition for Green Growth came into effect and required a wide range of investors including pension and security funds to report the indicators until the end of June next year.
Under the law, institutional investors are required to indicate how environmental, social and governance (ESG) factors will be integrated into their investment policies along. It also requires institutional investors to establish with risk management where appropriate, BusinessDesk says, and report how they’re integrating climate change considerations, particularly how they are helping slow down global warming and support France’s energy transition.
Some institutional investors in New Zealand are, however, already reporting climate change-related indicators. For example, organisations such as the New Zealand Superannuation Fund already voluntarily disclose their carbon footprint. Nonetheless, some asset managers and advisers claim using non-financial indicators such as climate change-related factors to decide where to invest would breach fiduciary duty.
Climate change and dinner haunts: five minutes with Louise Trevena-Downing
Freshfields advises on Asia-Pacific’s first climate bond