- Reserve Bank of New Zealand takes on climate transition.
- The bank is assessing the potential impacts of climate transition on employment and Inflation.
The Reserve Bank of New Zealand is actively improving its understanding of how climate change, the macroeconomy, and monetary policy interact. They are well aware of the historical impact of droughts on worsening recessions. They assess the potential effects on employment and Inflation as New Zealand aims for a net-zero transition.
The central bank is taking various steps to address climate change, including conducting stress tests for climate-related risks and providing guidance to regulated entities on risk management. They emphasise the need for collective action to transition economic and financial systems to sustainability.