Summarised by Centrist
Starting next year, banks will not only have to report on the amount of greenhouse gases their operations generate, but also the amount generated through their lending activities! “This is absolutely nuts, and the sooner the new Government does away with the crazy law which requires such a meaningless calculation the better,” says former National leader Don Brash.
The logic of requiring banks to soon estimate the greenhouse gases generated by their lending activities is a bridge too far, argues Brash. Can this even be accurately assessed for infrastructure projects like motorways?
According to Brash, focus should be on practical measures to address climate change, like the Emission Trading Scheme (ETS).
He argues that while climate change poses risks and opportunities for banks, these risks are relatively small compared to other risks they routinely manage.
“(V)ery rarely are commercial or corporate loans made for terms longer than five or six years. The risk of the sea level rising materially within six years is trivial compared with the risk that a corporate borrower may get into trouble for some other reason over that period,” he says.
