NZ lags on sustainable finance

New Zealand is falling behind the rest of the world in its use of sustainable finance putting at risk our chances of attracting international investment while domestic investors are missing out on the chance to have more say in what companies are doing, a legal expert is warning.

Sustainable bonds — debt which is raised by companies or organisations to meet a specific climate change or social goal — has hovered around $2-$3 billion a year in New Zealand for the last three years.

But globally it has risen from US$326b ($515b) in 2019 to US$1.03 trillion last year and is set to hit US$1.5t in 2022.

Luke Ford, a partner at Chapman Tripp in its capital markets team who specialises in sustainable finance, said that meant New Zealand had finished 2021 further behind in the world rankings than in 2017 when the first green bonds were issued here.

“Sustainable finance across its various forms . . . is on a growth trajectory in New Zealand. But other countries are setting a cracking pace, leaving us still in their dust.”

Ford said one of the reasons New Zealand had lagged behind was because there had not been the large uptake of social and green bonds in 2019 that happened overseas.