Public consultation is underway in New Zealand on a proposed regime requiring companies to report their climate-related financial risks.

The consultation, jointly run by the Business and Environment ministries, runs until December 13.

A range of organisations, including the Insurance Council of New Zealand, Z Energy and Meridian Energy, want a mandatory regime to ensure consistent, long term and comparable reporting of climate risk.

The proposal would see companies provide climate change information alongside financial statements in annual reports, ensuring companies understand and disclose how climate change will affect their business.

“We are seeing increasing demand from the private sector for greater clarity and certainty regarding these types of disclosures,” Climate Change Minister James Shaw says in a statement..

Better provision of information would enable financial markets to effectively price climate change risks as well as incentivise low-emissions and resilient investments, Mr Shaw says.

“For example, if we have an airport built on a waterfront that is going to be affected by climate change-induced sea level rise, these risks need to be understood and disclosed, so that both the company and its investors have appropriate information for decision-making.”

The proposed new reporting rules follow a taskforce on climate-related financial disclosures (TCFD) framework. Other countries, including Australia, Canada, the UK, France, Japan, and the European Union are working to implement the framework.