RBNZ welcomes climate change consultation

RBNZ welcomes climate change consultation | Insurance Business New Zealand

RBNZ welcomes climate change consultation

The Reserve Bank of New Zealand (RBNZ) has welcomed the draft advice issued by the Climate Change Commission which will guide New Zealand in the steps it must take to reduce greenhouse gas emissions and address climate change.

“We welcome the Commission’s draft advice as a considered and substantial contribution to shifting New Zealand towards a more climate-resilient future,” said Reserve Bank Governor Adrian Orr.

“The draft advice makes a strong start at exploring linkages between investment and climate resilience, and we appreciate that it recognises the interplay between the environment, economics, finance and wellbeing. We agree that interventions in all areas need to be properly considered and coherent.”

In its response to the consultation held by the commission, RBNZ emphasized the need to understand and address the exposure of the financial sector to climate-related risks.

“We believe that climate change could lead to material economic and financial stability risks and as kaitiaki of the financial system, we have a strong interest in the effect that this will have on the economic wellbeing of New Zealanders for generations to come,” said Orr.

“It’s important to take a collective approach and we expect the firms that we regulate to pay close attention to these critical issues and risks.”

The reserve bank’s submission centred on five key points, namely:

  • Climate change and how it impacts financial stability
  • The role of finance
  • Disclosure as a mechanism to improve the systemic management on climate risks
  • The importance of investment
  • A Te Ao Māori  lens, and the need for a considered and aligned approach

In 2018, RBNZ launched its own climate change strategy. It is also part of the international Network for Greening the Financial System (NGFS), along with 83 other central banks and regulators.