Tracking risks of climate change
The Reserve Bank has published its first climate-related disclosure report, highlighting the growing importance of addressing environmental risks.
Covering the period up to June 30, the report outlines the impact of climate change on the central bank’s three core objectives: price stability, financial system stability, and the broader mandate to serve New Zealand's economic wellbeing.
Climate change, the bank noted, poses risks that could affect price stability and financial system resilience.
To address these risks, the Reserve Bank has integrated climate-focused governance, strategies, and metrics into its risk management framework.
Long-term view drives climate strategy
Reserve Bank Governor Adrian Orr (pictured left) and Chair Professor Neil Quigley (pictured right) emphasised the importance of long-term planning, cautioning against short-term thinking that leaves environmental and social issues for future generations.
“We have consistently spoken about the perils of short-termism in economic and business decision making,” Orr and Quigley said.
Since 2018, the Reserve Bank has developed its climate strategy to align financial policies with the goal of supporting a low-emissions economy.
Collaboration and strategy updates for the future
The Reserve Bank plans to revise its climate strategy over the coming months, setting a course for 2030 and beyond.
Quigley and Orr expressed gratitude for the collective efforts being made in New Zealand and globally.
“The combination of our actions great and small can achieve the transformative change the future demands of us,” they said.
The disclosure report emphasises the importance of collaborative efforts among financial institutions, regulators, and stakeholders to achieve a climate-resilient economy.
Embedding climate into the Reserve Bank’s core work
The Reserve Bank, which recently released its annual report for the year ending June 30, stressed that climate considerations are not an optional extra but are integral to its role.
“Addressing [climate change] will continue to require concerted, collaborative efforts, but it remains eminently achievable,” Orr and Quiqley said.
Moving forward, the Reserve Bank will update metrics and governance structures.
Read the RBNZ announcement here.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
