Source: Reserve Bank of New Zealand
19 September 2022 – The Reserve Bank of Zealand – Te Pūtea Matua is working with central banks internationally to help increase the resilience of the financial system against the risks of a changing climate.
In a speech delivered today at the Climate Change and Business Conference, Reserve Bank Governor Adrian Orr outlined the steps the RBNZ 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,” Mr Orr says.
By law, the RBNZ aims 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,” he says. “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.”
The Reserve Bank is working with over 110 central banks around the world and key New Zealand organisations to better understand and integrate climate considerations into our work.
Mr Orr says: “Assessing material risks to banks and insurers, and the financial system as an ecosystem, is our core business. 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.”
RBNZ’s work on climate change is anchored in the Reserve Bank Act. Mr Orr noted the new Financial Policy Remit issued by the Minister of Finance which highlights the desirability of the Reserve Bank having regard to climate change.
The Governor highlighted that climate impacts are here now and increasingly felt, and it is important to act to reduce risks to the financial system.
