Happy holidays from the Centre for Sustainable Finance: Toitū Tahua, as we look forward to saying ‘that’s a wrap’ for 2024.
We hope you will take time to reflect on the unique role financial sector leaders have in securing shared, long-term prosperity in Aotearoa New Zealand.
We are an optional market.
We are in a competition for capital.
Your leadership is needed now more than ever.
In the words of Lord Nicholas Stern, the climate transition will recast the economic story across the world.
New Zealand must respond with confidence and clarity, to the risks we can know, the ones that we can’t, and the opportunities that lie ahead.
Please join the CSF team and Board as we share a longer than usual update with a few highlights from the year in review.
Our work is ambitous.
It is only possible with the support of our partners.
Thank you.
ANZ, ASB, BNZ, Chapman Tripp, Deloitte, EY, KPMG, Ministry for the Environment, MinterEllisonRuddWatts, New Zealand Green Investment Finance, New Zealand Super Fund, PwC, Rabobank, Westpac.
And to our associate partners.
HSBC New Zealand, New Zealand Local Government Funding Agency (LGFA), Tower Insurance.
Matt Whineray on COP29
Thanks to our partners who attended our final meeting on Monday 9 December. Our Chair, Matt Whineray shared his insights from COP29 in Baku, Azerbaijan.
Matt’s speech is published in full here.
Enabling KiwiSaver investment into private assets
KiwiSaver funds invest far less into unlisted shares than retirement savings scheme providers in other jurisdictions. This means many New Zealanders aren’t benefitting from investment options that can provide potentially higher financial returns and may also bring long-term positive environmental, social, and economic outcomes.
To understand why, in 2023 we convened an investor working group and published recommendations, for Government and industry, on reducing the barriers preventing KiwiSaver funds doing this type of investment.
Our partners MinterEllisonRuddWatts and Chapman Tripp then provided a joint opinion, finding that while there are no explicit legal barriers there are legislative and regulatory impediments contributing to KiwiSaver’s low rates of investment into private assets.
That’s why we are pleased to see this week that the Ministry for Business, Innovation and Employment is consulting on capital markets settings that enable KiwiSaver investment in private assets.
Read and respond to the consultation document here.
Read more about our work here.
Mobilizing and directing capital into sustainable agriculture and forestry
In April 2024 we presented the Minister of Climate Change with key design recommendations for the Aotearoa New Zealand Sustainable Finance Taxonomy (NZ Taxonomy).
We are now pleased to be leading development of the NZ Taxonomy, starting with mitigation, adaptation and resilience criteria for Agriculture and Forestry. CSF is the Crown liaison and delivery partner for the NZ Taxonomy.
We acknowledge the leadership of Hon. Simon Watts, Minister of Climate Change, and we commend the Government on supporting this crucial component of a robust and credible sustainable finance system that is recognisable to international investors, customers and markets.
Listen to the NZ Taxonomy information webinar here.
Building a highly skilled team
The CSF team has grown along with our work program. We have deep experience in finance, corporate sustainability, innovation, policy development, academia and campaigning.
Please reach out if you would like to connect.
Enabling Kiwi SMEs
Small and Medium-sized Enterprises (SMEs) realise the importance of building businesses that can be sustained over the long term. They often don’t have the resources and guidance to understand sustainability risks to their business and opportunities to respond to changing customer and lender expectations.
We developed the ‘Starter for Ten: 10 Topics for SMEs to start sustainability reporting’ to provide a clear and concise tool for SMEs to begin measuring and reporting on sustainability-related matters, reducing risk, increasing resilience and making more informed business decisions.
It is also a resource for banks to support small business customers with sustainability reporting and a starting point for conversations about sustainable finance.
Download the ‘Starter for Ten: 10 Topics for SMEs’ guidance, here.
Providing clarity on the Government’s sustainable finance priorities
The New Zealand Government is partnering with us to frame its sustainable finance strategy. The strategy will provide clarity on the Government’s priorities to increase the flow of domestic and international capital for sustainable and transition opportunities.
Aotearoa New Zealand’s ranking on attractiveness for climate investment is low relative to other developed countries. A coordinated approach to mobilising sustainable and transition finance is key to decarbonising our economy, meeting our international obligations, maintaining access to international markets and ensuring a cleaner, healthier, more resilient economy here at home.
We are aiming to provide a cohesive framework that is recognisable to international capital providers and guides related areas of work including the development of the NZ Taxonomy and novel solutions aimed at accelerating private finance.
Financing clean, abundant and affordable energy
We are pleased to be working alongside our partners and key agencies to identify novel financing solutions that mobilize and direct private capital into abundant and affordable clean energy, one of the five objectives of the Aotearoa New Zealand climate change strategy.
Please email Xavier Black to learn more about this workstream.
Supporting enabling policy
Climate related financial disclosures are here to stay. Countries are moving to taxonomies and disclosures in the competition for markets.
More than 80% of New Zealand’s exports by value are now going to countries with mandatory climate-related disclosures either in force or proposed.
If New Zealand stands still, we will fall behind.
We need to make it easy for potential foreign direct investment to engage, and our exporters need to be fit for the markets they are targeting.
That’s why we joined forces with the Sustainable Business Council, Institute of Directors and the Climate Leaders Coalition to commend the responsiveness of the External Reporting Board (XRB) to market concerns regarding the regulatory framework and the commitment to providing further guidance on the disclosures. This proactive approach is crucial in ensuring clarity and consistency as Aotearoa navigates these changes.
Read our submission to the XRB here.
We look forward to seeing you in 2025. We leave you with a parting thought from Matt last week.
“We can lower our training standards here at home. But then we can’t expect to win when we play against countries that train to a higher standard”.
