New Zealand’s central bank governor Adrian Orr has revealed the Reserve Bank of New Zealand is working with more than 110 central banks around the world to better understand and respond to climate change.
“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,” Orr said on Monday during a speech at a conference on climate change and business.
Orr said that financial stability is best maintained when all relevant risks are identified, priced, and allocated to those best able to manage them.
“Climate impacts are here now, and the risks of further impacts are here to stay. But there is still much within our control,” Orr said.
Orr said there had been “no shortage” of extreme weather linked to climate change across the world in recent months and it was important for the central bank to take account of the “current and future impacts of climate change” under its mandate to ensure financial stability.
Orr’s remarks come after his predecessor, Graeme Wheeler, earlier this year criticised the central bank governor for focusing on the “extraneous political issue” of climate change during his tenure.
Under world-first legislation passed last October, about 200 of New Zealand’s biggest financial firms will from next year be obligated to disclose their emissions and report annually on climate change-related risks to their business.