MNI BRIEF: CO2 Of RBNZ Bond Holdings Higher Than Benchmark

The carbon intensity of the Reserve Bank of New Zealand's sovereign bond holdings is just over 15% higher than the S&P G7 Sovereign bond index, and is skewed by holdings of bonds from higher-emitting countries such as Australia and Canada.

The information is contained in the RBNZ's 2021 Climate Change Report, issued on Tuesday, which shows that NZ's sovereign bond portfolio has a carbon intensity of around 280 tonnes of carbon emissions on a weighted average carbon intensity basis against 240 tonnes for the S&P G7 index.

The report also shows that the RBNZ holds US$100 million in bonds through the Bank of International Settlements' Green Bond Investment Pool.

The RBNZ measured its own carbon footprint in 2020/21 and found it was 10% lower than the previous year at 10,104 tonnes of CO2. This was helped by a 77% fall in business travel due to the pandemic. The RBNZ report said the bank was assessing its approach to monetary policy, and how it should account for the impact of climate change, but that this research was continuing.