Extreme weather events in New Zealand: Financial market-related impacts

What is it about?

This study finds that the distributions of extreme weather events (EWEs) in New Zealand have been relatively stable over the past several decades. They bear only limited resemblance to conventional measures of the impacts of climate change. Plus, NZ EWEs associate more with cooler, rainier, and windier conditions compared to similar distributions in Global North countries. Unlike Global North settings, the study also finds that the share prices of firms in the NZX50 are mostly insensitive to local EWEs. The stability and muted response of NZ investors to local EWEs is consistent with the view that NZ investors have already factored in much of the EWE risk into share market prices thereby obviating the need for mandatory disclosure of material EWE impacts.

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