In a report released today, Climate Changed 2021 and Beyond, the Reserve Bank of New Zealand - Te Pūtea Matua outlined its actions to mitigate and manage the significant economic risks associated with climate change.
Reserve Bank Governor Adrian Orr says that the challenge of understanding and managing climate-related risks is here.
“Ongoing climate change has brought with it material economic and financial risks that we are obliged to identify, manage, and mitigate as part of our daily activities,” Mr Orr says.
“The financial stability risks associated with climate change are significant, necessitating an urgent and collaborative response. Our efforts at Te Pūtea Matua include ensuring our own house is in order, as well as working directly with our regulated institutions and domestic and global networks to best manage the climate transition.”
The Reserve Bank’s Climate Change Strategy, includes:
- Measuring and managing our own operational emissions, including our balance sheet;
- Working directly with our regulated entities on climate-related risk management, including stress testing and supervisory frameworks; and
- Leading the Council of Financial Regulators’ climate work streams.
“We recognise the need for more action than current, that is why we have laid out our commitments and future plans around climate change in this report,” Mr Orr says.
The Reserve Bank is also an active member, along with 95 other central banks and supervisors, of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS).
“I very much welcome the Reserve Bank of New Zealand’s report on its climate change strategy, confirming the dedication of central banks and supervisors worldwide to address this vitally important challenge. There is no time to lose,” NGFS Chairperson Frank Elderson says.
The release of the report comes as the United Nation’s COP26 Climate Change Conference gets underway in Glasgow this week.
The Reserve Bank’s Climate Change Strategy, launched in 2018, has three work streams:
- Get our house in order: Monitoring and managing our own climate impacts.
- Get the settings in place: Mainstreaming climate by understanding and incorporating the impacts of climate change into our core functions.
- Show the way: Leading through collaboration.