Sustainable finance

Sustainable finance integrates environmental and social considerations into financial decision-making. In Aotearoa New Zealand, public support is high, with three-quarters of New Zealanders expecting their investments to be ethical and responsible. Sustainable finance is essential for meeting economic, social and environmental goals. It can mobilise capital for infrastructure, renewable energy, housing and the transition to net zero. Global partners are embedding sustainability in regulation, and New Zealand must align to remain competitive.

Create a national sustainable finance strategy

New Zealand has made progress in areas such as climate disclosures, green bonds and responsible investment requirements for Crown financial institutions. However, global momentum is increasing. A national sustainable finance strategy would coordinate efforts across agencies, reflect international standards and attract investment. It should be co-developed with industry and based on the 2020 Sustainable Finance Roadmap, aligning public and private capital to support sustainability in sectors such as agriculture, infrastructure and energy.

Taxonomy

To support capital flows and prevent greenwashing, a clear, credible and interoperable sustainable finance taxonomy is needed. Collaboration with Australia and alignment with EU frameworks is recommended. A multi-agency Sustainable Finance Advisory Council is proposed to guide the strategy and ensure policy consistency. This would facilitate the just transition to net zero and improve comparability of ESG data and product standards.

Sustainability disclosures

Clarity is needed to confirm that fiduciary duties include ESG considerations. Strengthening ESG disclosures is essential to maintain alignment with global markets. New Zealand’s mandatory climate-related disclosure regime is in place, and future alignment with the International Sustainability Standards Board (ISSB) and the Taskforce on Nature-related Financial Disclosures (TNFD) is encouraged. This would support investor decision-making and market transparency.

Stewardship

Investor stewardship can influence corporate behaviour and support long-term sustainability outcomes. The Stewardship Code Aotearoa New Zealand provides a framework for effective engagement. Government support is recommended to maintain the Code’s oversight and ensure adoption. This would align New Zealand with international regulators and embed stewardship practices across the market.

Eliminating greenwashing with product labelling standards

A 2023 survey found that 74% of New Zealanders expect their KiwiSaver or fund to be ethically managed, while 50% are concerned about greenwashing. Product labelling standards, including RIAA’s Certification Program, can enhance trust. Government support is needed to improve transparency, consistency and education via tools such as sorted.org.nz.

Maintain a seat at the table to shape global developments

New Zealand’s financial system is linked to global markets, with increasing ESG regulations. Continued engagement in forums such as the International Platform on Sustainable Finance (IPSF) and the Network for Greening the Financial System (NGFS) is essential. Trans-Tasman cooperation under the Roadmap to 2035 and 2+2 Climate and Finance Dialogue is also recommended.

Continue to develop and integrate He Ara Waiora to support Te Ao Māori knowledge and perspectives

The Māori economy is valued at NZ$68.7 billion. Māori and Iwi perspectives offer valuable insights for climate action and sustainable finance. Integration of He Ara Waiora in policy and stewardship practices is advised. Government should support Indigenous trade and investment and encourage reporting standards that reflect cultural values.

Make a strong commitment to human rights protection

Legislation on modern slavery is recommended to align with global markets and support ethical practices. A just transition strategy is needed to ensure equitable outcomes as New Zealand moves to a low-carbon economy. Promoting inclusion and economic equity will support sustainable development.

Protect nature and our natural capital

With 36% of GDP reliant on biodiversity, protecting nature is economically significant. Government action should support nature-positive policies, impact investing, risk mitigation, and adoption of TNFD standards. Strong commitments signal alignment with international biodiversity frameworks such as the UN ‘30×30’ initiative.

Make a strong commitment to the United Nations Sustainable Development Goals

New Zealand’s commitment to the SDGs requires a cross-agency strategy, clear indicators, and effective monitoring. Most SDG targets are lagging globally, and coordinated guidance is necessary to accelerate domestic progress and align with the 2030 Agenda.