To support New Zealand meeting its emissions reduction targets, it is critical that we get our own house in order first. We can do this by better understanding and reducing the emissions we create while performing our core functions as a central bank.
Like many other central banks and regulators, we are taking action to integrate climate change considerations within our operations.
Calculate our carbon footprint
Calculate our carbon footprint (based on the current accepted practice for New Zealand) and publish a breakdown of emissions in our annual report.
Establish a target
Establish a target for reducing or mitigating our future carbon emissions, formulate a strategy for achieving that target, and report on performance against it.
What we are doing
So far, we have:
- calculated our operational carbon footprint and had it verified by an accredited third party
- published a breakdown of our operational emissions in our annual report or climate-related disclosure and will continue to do so in future reports
- established emission reduction targets for a portion of our operational emissions
- started to formulate a strategy for achieving those targets and reporting on performance against them.
Our emissions reduction targets and carbon footprint
In the 2022/23 financial year, we set our first emission reduction targets for our gross emissions from combustible fuels (heat), electricity, waste, and business travel, relative to our base year of 2019/20.
By 2025
-21 %
Our emission reduction target is -21% in the 2024/25 financial year, relative to our base year of 2019/20, for emissions we can control and measure.
By 2030
-42 %
Our emission reduction target is -42% in the 2029/30 financial year, relative to our base year of 2019/20, for emissions we can control and measure.
How we measure our operational carbon footprint
We measure our Greenhouse Gas (GHG) emissions using the 3 ‘scopes’ defined by the Greenhouse Gas Protocol.
Scope 1 emissions
Direct emissions from natural gas combusted in our building.
Scope 2 emissions
Electricity we purchase.
Scope 3 emissions
All other indirect emissions associated with our operations.
We have aligned our measurement and reporting methodology as closely as possible with the Greenhouse Gas Protocol and applied New Zealand-specific guidelines and emission factors published by the New Zealand Ministry for the Environment. Where specific factors are not available for New Zealand, we apply international factors in our calculation.
Our emission profile, much like those of other service-based organisations, is dominated by Scope 3 emissions. The main source of emissions is purchased goods and services. IT services make up just under half of this, with communication services, management consultancy and property services being the other main contributors. We are working to refine measurement methodologies for purchased goods and services.
Meeting the currency needs of the public is one of our main functions and we include emissions from the production and freight of currency in our footprint. These collectively are the second-highest source of our emissions.
Our 2023/24 operational footprint
In the 2023/24 financial year, our operational emissions were 5,780 tonnes of CO2e. While this is 6% lower than our 2019/20 base year, it is a 15% increase vs our 2022/23 financial year emissions.
The main drivers of this were an increase in the amount of:
- goods and services purchased from external providers (largely IT, management consultancy, communications, and building services)
- business travel
- employee commuting.
Our carbon reduction journey
We have continued to investigate ways to reduce emissions in areas we have control over and that we can measure robustly. This includes reducing business travel in ways that do not unduly compromise our business objectives or connectivity with stakeholders, such as scheduling meetings virtually.
We have actively engaged with our external service providers to improve the quality of the emissions data we obtain and encouraging emission reductions in their operations.
Our investments and balance sheet
Our financial assets are held to meet our monetary policy and financial stability objectives. A large part of our assets are sovereign bonds including in our foreign reserves portfolio, which we require to have high standards of safety and liquidity. In keeping with our climate change strategic goals, we are thinking about how we can apply a sustainability perspective to our balance sheet while maintaining consistency with our existing policy objectives and frameworks.
As the amount of outstanding sustainable assets continues to increase, especially those of sovereign issuers, we will work towards including them in our investment mandates. The current challenges to doing so are having consistent and available data that allows monitoring of progress towards sustainable goals and recognised and accepted taxonomies across the investor community.
We must incorporate sustainability into our frameworks as it helps to ensure that we manage risks appropriately when considering our balance sheet activities, as well as where we can contribute more broadly to the development of these markets.
