SILVER This is New Zealand’s first ERP and it sets the direction for climate action for the next 15 years. It is a key consideration in the mix of our customer conversations about sustainable finance – alongside other themes like climate risk disclosure, how companies adapt to the impacts of climate change, pressure on boards to shore up their environmental, social and governance credentials, and an increasing focus on biodiversity and social issues.

It is also relevant for our own plans as we look to reduce emissions from our lending, which feeds into our net-zero emissions planning. We see the ERP as a macro plan that will need a large amount of funding from domestic and offshore markets. We expect it to drive a lot more demand for sustainable debt.

MARTIN Like all government spending, any funding required to implement the plan will be captured in the government’s budget. This is the basis for our funding plans. Any interaction with our green-bond programme will be elaborated on when we make our framework public over the coming months. We are planning our first sovereign green-bond syndication by the end of the calendar year.

SILVER Transport is a key theme in the ERP with major city centres called out alongside a range of initiatives on energy in the context of decarbonising industrial heat. The climate transition for transport and process heat is somewhat more challenging as the relevant sectors are much more fragmented than, say, energy generation or property.

However, there are avenues available to help with funding the transition of process heat. Many people are unaware of the Government Investment in Decarbonising Industry Fund, which was increased by a magnitude of 10 this year. It is available to fund up to half the cost of emission reduction projects for businesses, including large businesses, and there is no cap on the level of funding available.
We encourage every New Zealand business, particularly those with fossil fuel based assets and process heat in their industrial operations, to explore this funding alongside their normal debt needs to accelerate their climate transition.

We are engaging with our customers to access the fund and more broadly to help them transition in a way that meets government, industry and stakeholder expectations. The ERP lays out this pathway quite strongly.

BISHOP We already have emission reduction targets in our long-term climate plan, ultimately to achieve net zero emissions by 2050. We are proactively undertaking several transport initiatives including electric buses, trains and ferries, cycleways, busways and our city rail link project – which is undergrounding the train network in central Auckland. A number of these initiatives will be funded through our green-bond programme.

BUTCHER We have 75 out of the 78 councils in New Zealand as members so we are close to covering the country. We launched a green- and social-loan product in late 2021, where councils can borrow against eligible projects at a discounted margin.

We are about to bring a second product, which will be a climate-linked loan with the margin being related to a pathway for emissions reduction. This will be a more generic product that will be suitable for all councils. It is currently hard for councils to identify and achieve large-scale projects to be eligible for green and social funding, and they lack the reporting tools. We are expecting good take-up.