The recent report on climate change released by the IPCC says that the impacts such as extreme weather events are becoming more common and frequent, temperatures will rise more quickly than forecast, and much more action is needed to reduce greenhouse gas emission levels.
In New Zealand the Aotearoa Circle commissioned Chapmann Tripp to provide a legal opinion on how Trustees should factor climate change into their investment decision making as part of their fiduciary duties (this follows from an opinion released last year for Company Directors and fund managers). A link to the opinion is here and the key conclusion is copied below:
In light of the increasing understanding and awareness of climate-related financial risk in New Zealand in 2021, it is appropriate that trustees identify and assess this risk to determine whether it is likely to be material. Where it is likely to be material, trustees should appropriately manage that risk over the mid–long term, including by diversification and/or divestment of certain investments if appropriate. Trustees that fail to undertake any consideration of climate-related investment risk, where that risk is likely to be material, will be at risk of breaching their duties to beneficiaries.
This opinion is ground-breaking, and we believe will be material for most Trusts in New Zealand.