The central bank is working with other banks and organisations to better understand climate change
The Reserve Bank of New Zealand is working with its offshore counterparts to make the financial system more resilient against the risks of a changing climate.
Speaking at the Climate Change and Business Conference, RBNZ Governor Adrian Orr outlined the steps the central bank is taking to integrate climate considerations into its core operations of financial stability and monetary policy.
“We are the kaitiaki (guardians) of the financial system tasked to maintain and enhance financial stability,” Orr said.
Read more: What is fair for Kiwis in relation to property and climate change impacts?
The RBNZ is mandated by law to promote prosperity and wellbeing for everyone in Aotearoa and contribute to a sustainable and productive economy.
“Historically, economic wellbeing and prosperity were built with the benefit of a stable climate,” Orr said. “As the climate continues to change, wellbeing and prosperity are harmed. To deliver on the Reserve Bank’s purpose, it’s important that we understand this context.”
With its work on climate change anchored in the Reserve Bank Act, the RBNZ said it is working with more than 110 central banks around the world as well as with key NZ organisations to better understand and integrate climate considerations into its work.
Read next: Climate change can result in devastating property issues
“Assessing material risks to banks and insurers, and the financial system as an ecosystem, is our core business,” Orr said. “Financial stability is best maintained when all relevant risks are identified, priced, and allocated to those best able to manage them. To meet our financial stability objective, it’s important for us to take account of the current and future impacts of climate change.”
Orr stressed that climate impacts are here now and increasingly felt, and it is important to act to reduce risks to the financial system
