Russell DeborahDr DEBORAH RUSSELL (Labour—New Lynn): Thank you Mr Speaker. I'm delighted to have an opportunity to speak on this revolutionary bill. It's an exciting piece of legislation and normally people don't actually get too excited about accounting standards. I don't understand that personally it's something that I find very interesting but this is legislation that for one of the first times in the world ensures that we will have reporting on climate-related risks that large entities will be required to understand and to report on the climate-related risks that they are facing.Information is power. Information helps us to understand the world to understand our place in it. Information helps us to understand how we may be affected by events. Information helps us to understand what actions we may be required to take. But we need to have that information in the first place. We need to have the information about our investments about the places where we live information about how the world may affect matters that are important to us. And this is what this bill does. I wish to particularly commend the speech by the Hon James Shaw when he talked about the risks of climate and he talked about how that affects investment decisions when he talked about the issues around understanding risk understanding climate and ensuring that we all know what is going on; how it does create risks for companies. It was a very interesting speech and I think he exactly targeted those particular issues very well indeed.I wish to add to that analysis that was presented by the Hon James Shaw. In terms of understanding the risk that we face with investments so that as individual investors we understand it so that as people dealing with companies and with large entities we understand it so companies understand each other—I think that's what's really important about this bill is it forces companies it forces large entities it forces financial institutions to understand themselves to understand for themselves what their own exposure is. So it's having that in-depth understanding. All too often companies and large entities have a tendency perhaps to avoid thinking about certain issues. They don't have to. This bill will force them to understand their own risk profile before they can report it onwards and understanding their own risk profile with respect to the climate will enable them to take action themselves to manage their own affairs too. So it has that double purpose sitting in it. So I think that is part of the risk that we need to understand and that companies need to understand.I think there are a number of matters in this bill which will need very careful review by the select committee and they are interesting issues. I first of all want to focus on something that I hope that the select committee will pay due regard to. If we look at new section 461O inserted by clause 7—it is going into the financial markets legislation I think—it talks about what a climate reporting entity is. Now not all entities will be required to do this climate reporting. It says that a climate reporting entity is someone—and this is what I hope the select committee will examine—who is a listed issuer of securities a registered bank a licenced insurer a credit union a building society. Of course all these institutions have something in common; they deal with investments and they deal with money and they deal with it on the part on behalf of retail investors as well as dealing with it in respect of banks and institutional investors. Are there other entities that should be included in that list of climate reporting entities? That is an issue that I hope that the select committee will give some thought to as it works its way through this bill. However it is not all banks it is not all credit unions it is not all licensed insurers and so on that will be required to report under this; it is only large climate-reporting entities. That is what the bill intends at this stage. So that then becomes a question as to what is a large climate-reporting entity. Now the suggestion offered in the bill at this stage is that a large entity is an entity that has total assets in the previous two accounting periods that exceed a billion dollars. Is that the right threshold? Should it be more? Should it be less? Now the estimate is that around about 200 entities in New Zealand will be required to report under this bill if it becomes law. Is that threshold set at the right level? I would hope that the select committee will examine that as well. Perhaps by setting it a little lower another group of companies could be brought in; there could be a natural sort of place where the line falls. So I hope the select committee will examine that as well.There is something else in this that I find very very interesting and that is the role that has been set aside for the XRB. Now the XRB is the External Reporting Board and as an accountant I find them to be a very interesting entity. What is interesting about this is that in terms of developing these climate-reporting standards we'll be relying on a group of professionals a group of accountants a group of people involved in the financial markets a group of people who understand what goes into a set of financial statements to spend some time thinking about what should be reported and how it should be reported. And there will be a process for doing that; a process of developing a standard and putting an exposure draft out and getting comments back on it. What it does is it draws on the civil institutions of our society to consider exactly what should be reported in a climate standard and how it should be reported. We are drawing on the expertise of professionals and I think it is a very important role for professionals in our society. I also as a former accountant and someone who still in some ways understands the world through you know double-entry journal entries—which is a bit sad—I think that accountants have a great deal of value to offer in this space and that their accumulated knowledge of the way that financial statements work will actually be very very useful in this regard. So the XRB will develop this standard and then the large climate-reporting entities will be required to comply with it.But there is another aspect to this reporting that the XRB will be developing standards for and it is a suggestion which I think—well it's in the bill at this stage—the select committee should actually give some serous regard to: that as well as issuing a standard on financial reporting around climate issues the XRB is going to be empowered to issue non-binding guidance that relates to non-financial reporting on some matters; so non-financial reporting on other issues that may relevant with respect to climate. So that is an interesting change. It gives them scope to move beyond just reporting on the financial accounting and on the balance sheet risks and on the numbers and think about some of the other issues. And I think that is an interesting expansion of the XRB's path. Now it is not required to do this but it may do so; it may issue guidance. So again in this regard we are relying on the External Reporting Board to actually have a really serious think about what could be done in this space and how we could improve our reporting on climate. And we are doing it in order that we may all make better decisions that we may all understand the risks we face and that we may all respond to them in an appropriate fashion.So this is an interesting bill. As a member of the Environment Committee I would have loved for this to come to the Environment Committee as well because I would have thoroughly enjoyed working through it. But I know that whichever committee it is sent to will do a thorough and good job looking at this interesting bill and ensuring that we do the best in terms of developing a way of reporting on climate risks that can lead the world and can develop something that other countries may also be interested in too. So it is a fantastic bill. I commend the Minister for this bill. I look forward to watching its progress through the House.