A day after celebrating a big policy win with the end offshore oil and gas exploration, Green party co-leader James Shaw has launched a major push for corporate New Zealand to take stock of and disclose climate change risks.
Shaw today launched New Zealand's first report on climate finance - which aims to shift investment away from the traditional carbon economy and into green alternatives - and would represent a turning point in the way business assesses climate change risk.
New Zealand had typically looked at climate change spending as a sunk cost, he said.
"If you stop thinking of it as a cost and start thinking it as an investment then inherent in that is a notion of a return."
While the ban on offshore oil exploration was about the end of an era, Shaw said the report was about what came next.
"Yesterday we announced that in the future we don't want to be looking for any fossil fuel reserves in NZ's oceans. What that does is send a long-term signal into the market place.
"It has no effect immediately but it does say that there will be a point – 20 or 30 years out – where we are not usually fossil fuels as part of our energy mix."
The new report was a look at what's available in terms of climate finance and what New Zealand needs to do.
In a dry year, New Zealand was getting about 15 per cent of its energy from gas, he said.
"We're going to have to work out what is the alternative and we're going to need to do that pretty quickly and that is going to need to be financed."
The report Climate Finance Landscape for Aotearoa New Zealand was produced for the Ministry of the Environment by David Hall and Sam Lindsay.
Essentially climate finance aims to reduce greenhouse gas emissions and to enhance sinks of greenhouse gas emissions.
"In other words," the report says, "climate finance funds projects that deliver mitigation benefits, adaptation benefits or dual mitigation/adaptation benefits."
So mitigation includes industries such as forestry which provide "sinks" for greenhouse gases. Adaptation includes policies which incentivise a shift to renewable energy sources.
The report outlines the current state of climate finance in New Zealand and makes 10 key recommendations.
These include tougher disclosure and reporting rules for climate-related financial liabilities.
The report draws on work by the international Task Force on Climate-Related Financial Disclosures (chaired by Michael Bloomberg) and describes this area as a "low hanging fruit".
It would effectively embed the disclosure of climate risk into responsibilities of directors.
Shaw said this was something the Government was looking into. It could be addressed at both a shareholder protection level – through organisations like the Financial Markets authority and at a financial stability level.
"We may incorporate this line of investigation into the second round of the Reserve Bank review," he said.
Work on the report had begun under the previous government. The new Government had already adopted, or was investigating, four of the recommendations including disclosure and reporting of climate risk.
The recommendation for a green investment fund had already been adopted, with $100m having been set aside as part of the coalition agreement. Treasury was currently working on a framework for the fund which it was hoped would incentivise co-investment with the private sector in green initiatives.
The recommendation for a review of carbon pricing was also being adopted. A review of New Zealand emission trading scheme would get underway later this year with a view to making it more effective in reducing the nation's carbon emissions.
Another recommendation was to push for a "structural realignment to climate objectives".
This effectively means addressing government policies that continue support the high carbon economy.
Shaw said this was happening as part of the new Government's Zero Carbon Act.
The Government will start a public consultation in May to lay the groundwork for a Zero Carbon Act and establish an independent climate change commission.
The aim is for a Zero Carbon Bill to be introduced by October 2018 with a target for net zero emissions for the economy by 2050
Karen Silk, Westpac GM Commercial, Corporate & Institutional, took part in the launch event and offered strong support for the proposals.
Westpac last month published a Climate Change Impact Report which modelled two scenarios for moving to a lower carbon economy.
It found that moving earlier and adopting a more proactive approach could save $30 billion in GDP growth.