Introduction
This disclosure sets out the work we are doing to understand, monitor and manage climate-related risks relating to our objectives. It is the first climate-related disclosure we have produced and covers the period to 30 June 2024.
Our three objectives
The Reserve Bank of New Zealand Act 2021 sets us three main objectives:
- an economic objective of achieving and maintaining stability in the general level of prices over the medium term
- a financial stability objective of protecting and promoting the stability of New Zealand’s financial system
- a central bank objective of otherwise acting as New Zealand’s central bank in a way that furthers the purposes of the Act.
Climate change may pose material risks to the achievement of these objectives. It requires us to ensure we have the right governance structures and settings, strategies, risk management practices, and metrics and targets in place to allow us to understand, monitor and manage climate-related risks in a timely and efficient manner.
Foreword
Kupu whakataki
We are pleased and proud to present the first climate-related disclosure from Te Pūtea Matua.
We are an organisation that values trust, transparency and data-driven analysis as we work to improve our resilience as a central bank, and the resilience of the wider financial system. Like most other central banks, and many of the entities we prudentially regulate, we work to build trust through the transparent disclosure of data and information on our handling of climate-related risk.
This is something we have been working towards for some time. We have consistently spoken about the perils of short-termism in economic and business decision making. Taking a short-term view means we risk ignoring social and environmental harms (or negative externalities) such as climate change, leaving them as issues for our future selves to resolve. The need to take a longer-term view was one of the reasons we developed our climate strategy in 2018.
We have worked closely with our stakeholders to implement that strategy ever since, with the production and publication of our inaugural climate-related disclosure this year representing a significant milestone in our developmental journey. We know there is more for us and others to do regarding climate change. Addressing it will continue to require concerted, collaborative efforts, but it remains eminently achievable. That is why we will spend the next few months updating and revising our climate strategy as we look ahead to 2030 and beyond, to best reflect our role as a central bank in supporting the transition to a climate-resilient, low-emissions economy.
Thank you to all those across Aotearoa and beyond for the efforts you are making to mitigate and adapt to climate change; the combination of our actions great and small can achieve the transformative change the future demands of us.
Professor Neil Quigley
Chair
17 October 2024
Adrian Orr
Governor
17 October 2024