Accelerating an equitable, inclusive financial system to enable a resilient, sustainable Aotearoa New Zealand.

Finance is a critical enabler for the transition to a low-carbon, inclusive, equitable economy and society in Aotearoa New Zealand.

Finance is the engine and lifeblood of an economy. Finance sits behind our electricity grid, transport system, roads, buildings, food, water and housing. The Climate Change Commission estimates Aotearoa New Zealand will need $34 billion of new capital in the next 12 years to finance our low carbon transition, and this number is only likely to rise.

Expectations around environmental and social accountability are changing rapidly among our global capital providers, customers, consumers and talent. Developing a sustainable financial system is about setting ourselves up for a thriving and prosperous society in a lower-emissions future. It’s essential to Aotearoa New Zealand’s economic proposition over the coming decade.

Aotearoa New Zealand urgently needs to scale up sustainable finance and redirect capital from polluting, extractive and unsustainable activities towards climate and sustainability solutions.

Greening finance and financing green requires data, disclosures, definitions and skills. These, in turn, will enable real economy outcomes that are within planetary and social limits. We need to leverage the very best talent we have and engage in deep, coordinated collaboration to build a financial system that enables capital to flow easily to the social, environmental and cultural outcomes we want.

  • Sustainable finance refers to the process of integrating environmental, social, and governance factors into financial decision-making, with the aim of promoting sustainable economic growth, mitigating risks, and ensuring the long-term stability of the financial system. It encompasses a broad range of financial activities, such as investment, lending, insurance, and risk management, and focuses on creating economic value while minimising negative environmental and social impacts.

  • ESG is a set of non-financial criteria that investors use to evaluate companies and investments based on their environmental, social, and governance practices. ESG factors may include a company's carbon footprint, social responsibility, labor practices, diversity and inclusion policies, executive compensation, board structure, and more. ESG is often used as a tool for sustainable investing, where investors seek to achieve positive social and environmental outcomes while generating financial returns.

  • Transition finance focuses on providing financing to help companies transition to more sustainable business models. It involves providing capital to support the shift from high-carbon, resource-intensive industries to low-carbon, more sustainable alternatives. Transition finance typically includes investments in renewable energy, energy efficiency, sustainable transportation, and other projects that contribute to a low-carbon economy. It also involves engaging with companies and industries to encourage them to adopt more sustainable practices and reduce their carbon footprint.