The Reserve Bank of New Zealand – Te Pūtea Matua has published Guidance for our regulated entities on managing
climate-related risks. This follows our consultation on draft Guidance in March 2023 and is one of the actions set for
us in the National Adaptation Plan.
Te Pūtea Matua is responsible for maintaining a stable financial system to promote the prosperity and well-being of New
Zealanders. As climate change poses risks to the stability of the financial system, we have a role to play in ensuring
entities manage their climate-related risks, says Kate Le Quesne, Director of Prudential Policy.
For example, insurers may face unexpectedly large claims because of more frequent and more severe adverse weather
events. Similarly, banks may see growing losses on loans to companies whose business models are no longer viable as the
climate changes.
“The Guidance sets out our expectations of how regulated entities should be identifying, managing, and monitoring
climate related risks. The Guidance is not prescriptive, as entities are best placed to decide how to apply it to their
business models and strategies,” Ms Le Quesne says.
“In March last year, we consulted with the sector on draft Guidance. Thanks to the valuable feedback we received, the
Guidance has been updated to include more examples, reduce overlaps with other guidance and draw more links to existing
parts of the prudential regime.
“We have also changed the layout to match that of the Aotearoa New Zealand Climate Standards, which are issued by the External Reporting Board and set out the separate climate-related disclosure regime. Aligning
the two sets of documents is designed to make things easier for anyone reading both, but our Guidance does not give
advice to entities on how to go about climate-related disclosure.
“We are grateful for the feedback we received and look forward to hearing how entities use the Guidance to manage their
climate-related risks. As risk management practices, climate-related risks and legislation are ever-evolving, we will
continue to update the Guidance from time to time,” says Ms Le Quesne.
More information: