New Zealand

New Zealand clearly operates with an up-to-date legal and policy architecture for emissions and climate planning (Zero Carbon Act, emissions budgets, ERP, climate strategy) and has set ambitious targets (2035, 2050). However, the planning lacks detail (for example, in removals, offsets, sectoral modeling) and lacks binding enforcement in some respects. Stakeholders perceive that commitments are insufficient. The Second Emissions Reduction Plan (ERP2) (released in 2024) changes the path toward the net-zero goal since it cancels numerous policies from the previous plan and is criticized for an over-reliance on forestry offsets and Carbon Capture. The government's decision in 2025 to reset the 2050 biogenic methane target is a clear step backward for the largest-emitting sector, agriculture. While the core legal framework remains, recent policy changes have eroded the credibility of the implementation plans.

The government maintains gender parity in public sector representation positions. In the private sector, the New Zealand Stock Exchange (NZX) Corporate Governance Code requires listed companies to disclose board gender diversity and ESG performance on a comply-or-explain basis. Voluntary initiatives encourage alignment with the SDGs and provide ESG guidance, such as the Sustainable Business Council and Toitū Tahua – Centre for Sustainable Finance, but is not mandatory. No legal requirement for employee representation on boards. New Zealand has an effective ESG guidance for supporting private sector contributions through its mandatory Climate-related Disclosures (CRD) regime, established by the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021.

New Zealand continues to maintain regular channels for public consultation and impact assessment. The multi-step national legislation process, including Select Committee submissions open to all citizens, remains a key mechanism. The government requires Regulatory Impact Statements for legislation amendments, which include identifying impacted groups, but a mandatory framework for social or equity-focused impact assessments for all proposed legislation and public policy is still missing. While agencies are guided to apply a Treaty of Waitangi analysis to policy, ensuring consideration of Māori interests (IP/LCs), this is an analysis tool, not a mandatory impact assessment. The Women's Equality Strategy aims to embed gender analysis across the public sector. but these appear to be strategic directions rather than a mandatory requirement. The Regulatory Standards Bill (under discussion in 2025) has raised concerns among critics that it could potentially constrain regulatory space and reduce scope for participation.

New Zealand's Treasury Living Standards Framework, which is underpinned by the concept of capitals (Natural, Financial, Physical, Human, Social) and is complemented by the indigenous framework He Ara Waiora, is integrated into the planning and policy cycle. Since 2019, the LSF has been central to the Wellbeing Budgets, requiring government agencies to use its domains for value-for-money assessments. Furthermore, the Public Finance Act 1989 was amended to require the government to report annually on its wellbeing objectives and the Treasury to report every four years on the state of wellbeing, with these reports underpinned by the LSF Dashboard. However, the comprehensive national wealth accounting component remains under development by Stats New Zealand (Tatauranga Aotearoa). Progress is being made on sub-accounts (like natural capital accounts), but a fully comprehensive and integrated set of national wealth accounts covering all five capitals is not yet complete.

The country had established the New Zealand Green Investment Finance (NZGIF) to mobilize capital into green projects. However, the current government confirmed the disestablishment of the NZGIF in April 2025, citing limited results and an overlap with other government funds. The Financial Sector (Climate-related Disclosures) Act 2021 continues to require large financial institutions to disclose climate-related risks and opportunities in line with the TCFD framework. On stress testing, the Reserve Bank of New Zealand (RBNZ) ran its first climate change industry-wide stress test in 2023 and has since incorporated environmental risks into its prudential supervision. The Centre for Sustainable Finance is leading the development of a sustainable finance taxonomy.

The Treasury has established and actively managed a Sovereign Green Bond Framework and program. It has issued green bonds to finance a portfolio of climate-related expenditures in areas like clean transport, climate adaptation, and renewable energy. This is a major step in formalizing green finance. The 2025/26 budget forecasts continue to allocate funds to these categories, showing a sustained commitment.

The Reserve Bank of New Zealand (RBNZ) continues to analyze the implications of climate change on inflation and financial stability. In 2025, the RBNZ started a new five-year funding agreement that, while reducing some operational expenses, still supports its core functions, including its climate change strategy.

The 2025 Budget, in a shift from the previous government's "Wellbeing Budget," emphasizes fiscal prudence and economic growth. While it maintains funding for key climate-related projects, it also introduces some reductions. For example, some funding for the Energy Efficiency and Conservation Authority (EECA) and the Voluntary Carbon Market (VCM) has been reduced.

Overall, current framework is robust (regular bond issuances, ongoing RBNZ analysis), but it has not yet reached the level of "mandatory, detailed & regular stress testing... for all financial institutions." Still has ad-hoc elements and is subject to political shifts, as seen in the 2025 budget's reprioritizations.

New Zealand is one of the four founding members of the Agreement on Climate Change, Trade and Sustainability (ACCTS), ratified in 2025. This landmark agreement represents the highest standard for green trade, going beyond traditional FTAs to directly integrate trade and climate policy. The agreement eliminates tariffs on a wide list of over 300 environmental goods, including solar panels and wind turbines, and promotes trade in environmental services. It includes a legally binding framework to address harmful fossil fuel subsidies, including a list of prohibited subsidies. The ACCTS framework is designed to evolve and expand over time ("ACCTS+"), providing a model for the interoperability of green taxonomies and carbon pricing instruments. While New Zealand's own green taxonomy is still under development, its commitment to this framework within an international trade pact shows its high ambition.

The country has an emissions trading scheme in place but it has a major sectoral exemption (agriculture, which is around 50% of gross emissions). The previous government's plan to introduce a separate farm-level pricing scheme for agricultural emissions by 2025 was halted by the current coalition government. The country has a legally-binding carbon budget system under the Zero Carbon Act. It has set the first three five-year emissions budgets (2022–2035) and corresponding Emissions Reduction Plans (ERP1 for 2022-2025 and ERP2 for 2026-2030) as required. The country is reportedly on track to meet the first two budgets.

The new government, which took office in 2024, has introduced policy changes that reflect a different approach from the previous administration. Rather than a "whole-of-government" framework like the Wellbeing Budget, the new focus is on targeted, sector-specific reforms to attract private investment and reduce regulatory barriers.

The government has published its Second Emissions Reduction Plan (ERP2), which outlines actions for the 2026-2030 period. While the plan sets out a path for meeting future emissions budgets, the Climate Change Commission's 2025 monitoring report indicates that current plans are still insufficient to meet the third emissions budget (2031–2035) and the 2050 target.

The overall approach remains sectoral and fragmented. Without a dedicated cross-government body or a single strategy, there are still conflicting policy priorities and a lack of nationwide coordination.

The government adopted a Waste and Resource Efficiency Strategy in 2025 to drive waste minimisation and resource efficiency toward a circular economy. Regulated product-stewardship has shifted from pilots to rollout: six priority product classes are designated (plastic packaging, tyres, e-waste & large batteries, agrichemicals/containers, refrigerants & SGGs, farm plastics). Government is also progressing bioeconomy work (MBIE), including sector analyses and capability programmes. There’s no national CMUR target, the Right-to-Repair legislation has been introduced but has not been passed into law, and the consultation for the 5th edition of the Government Procurement Rules concluded in early 2025 but they do not yet contain legally binding circularity criteria.

The country has implemented CO₂ / emission standards for imported light passenger and commercial vehicles via the Clean Car Standard (2022), set annual targets for those emissions, and is phasing out internal combustion vehicle purchases in the public bus fleet, moving to only zero-emission buses for new public transport purchases. A major infrastructure commitment is the goal of 10.000 public EV charging points by 2030. The government fleet is being converted under the Electric Vehicles First policy. Transport emissions are addressed in New Zealand's Emissions Reduction Plans (via the Decarbonising Transport Action Plan 2022-25), with ambitious targets to reduce transport emissions around 41% by 2035. Nevertheless, full electrification of all transport modes lacks binding short-term mandates and targets, and some incentive tools have been removed, for instance the Clean Car Discount,(a rebate scheme for lower emission vehicles.

While the country's long-term ambitions remain high, recent policy shifts and budget decisions under the new government have introduced some uncertainty and reduced direct government investment.

The new government is taking a different approach to achieving its goals. The previous ambitious target of 100% renewable electricity generation by 2035 has been reframed. The government continues to support the underlying goal of increasing renewables but has placed a greater emphasis on energy security and affordability. The focus has shifted from direct government subsidies and a centralized approach to enabling private-sector investment and reducing regulatory barriers for both renewable and non-renewable projects (also for LNG imports, a policy that conflicts with a rapid transition to a low-carbon economy).

The Energy Efficiency and Conservation Strategy (EECS), which was a core part of the previous government's approach, has been deprioritized in favor of a market-led strategy. The new government, under Energy Minister Simon Watts, is undertaking a comprehensive review of the energy sector to ensure the electricity market is "fit for purpose" and to attract investment. While some positive initiatives have been launched, such as the "Solar on Farms" program to support farmers in adopting solar and battery systems, other decisions, such as the commitment of NZ$200 million in contingent funding to support new gas fields, have created a mixed policy signal.

The 2025 Budget reflects this shift by reducing some funding for clean energy initiatives and removing some subsidies.

Conclusion of the Jobs for Nature programme, a cornerstone of the previous government's policy, in June 2025. Similarly, the One Billion Trees program has been re-evaluated by the new government, with a less aggressive approach to planting and employment. The current administration's strategy focuses on stimulating private sector investment to drive job creation, rather than through large-scale, direct government employment programs. This approach could still lead to new green jobs in sectors like renewable energy and sustainable agriculture, but it lacks a centrally-managed program for job creation.

New Zealand has established a formal Just Transition Work Programme and embedded the Just Transition principle within its overarching climate legislation, the Emissions Reduction Plan (ERP). The government has created the Just Transition Unit (J-TU) and provided dedicated guidance frameworks defining a Just Transition as "vision-led, unifying and place-based," with an emphasis on regional leadership and addressing past inequities. The most prominent example is the transition planning in the Taranaki region, following the phase-out of new offshore oil and gas exploration.

There are government programmes that provide financial incentives and capability development which can be leveraged by MSMEs. The Investment Boost tax incentive announced in Budget 2025 provides a 20% deduction for new assets, which the government promotes as a means to encourage investment in environmentally friendly technologies, benefiting businesses of all sizes. The Energy Efficiency and Conservation Authority offer specific support for reducing environmental impact, and the Regional Business Partner Network offers co-funding and advice to improve operations and strategy, which includes sustainability initiatives. Most government support is sectoral rather than specific for MSMEs. New Zealand does not yet provide a separate legal form for social enterprise, these typically operate under existing structures (like companies or trusts.

While the country continues to have a social policy framework, recent government priorities have not translated into large-scale, innovative green pilots or strategic reform. The government's new Social Investment Fund is a positive step, but it functions more as a new funding and governance model for existing services rather than a new type of social program itself. Furthermore, recent welfare system changes, such as the Social Security Amendment Bill, have focused on reinforcing existing obligations rather than introducing new, innovative benefits. There also continues to be a lack of a clear, nationwide strategy that explicitly links social protection programs with the green economy transition.

The government is working to align theeee ANZBS with the Global Biodiversity Framework (GBF). The ANZBS and its implementation plan include time-bound goals (for 2025, 2030, 2050) across biodiversity outcomes—land, freshwater, coastal, and marine ecosystems. The Department of Conservation (DOC) publishes Implementation Progress Reports (latest for year ended 2023/24) tracking “204 actions” under the ANZBS Implementation Plan. A new National Policy Statement for Indigenous Biodiversity is being implemented, which gives direction to local authorities about identifying, protecting, restoring and partnering in the management of indigenous biodiversity. New Zealand participates also has a Marine Monitoring and Reporting Framework.

Stats NZ and the Ministry for the Environment jointly produce reports related to natural resources. Stats NZ continues to update its Environmental-Economic Accounts. However, the country still lacks a comprehensive natural capital strategy and accounting. On a positive note, the government uses natural capital indicators within the Living Standards Framework to provide a view of well-being, informing budget and policy decisions by assessing the country's wealth and sustainability for future generations. New Zealand still has no independent Natural Capital Committee or equivalent governance structure.

New Zealand has an updated strategy through the MPI's action plan 2025–2026 and its broader strategic intentions to 2028. These documents link economic prosperity with sustainability, aiming for improved environmental performance, including lower carbon emissions and enhanced biodiversity. The government has also set a legally binding target to reduce biogenic methane emissions by 10% by 2030 and a further reduction by 2050. New Zealand's agricultural sector undergone a subsidy reform in the 1980s which removed most price supports and input subsidies. This resulted in a market-based system that discourages the overuse of environmentally harmful inputs, although the country does not have a current policy of phasing out subsidies, as there are virtually none.

New Zealand has a national strategy to reduce food waste. Additionally, the country has an ongoing public health discussion around diets, with the Public Health Advisory Committee publishing reports on "rebalancing our food system". There are no binding criteria regarding public procurement.

In 2024, New Zealand began a BIOFIN assessment using international methodology to identify biodiversity funding needs, potential financing sources, and institutional gaps. In 2025, the New Zealand government announced support for the expansion of a voluntary nature credits market, via pilot projects involving landowners, farmers, iwi and conservation groups. New Zealand had a Green Investment Bank (NZGIF), established to invest in low-emissions / sustainability projects. However, in 2025 the government moved to disestablish NZGIF, citing performance concerns and overlap with existing funds. The government’s documents on scaling nature investment include ideas for nature markets, underlying infrastructure, and strengthening regulatory and legal enabling environments.

New Zealand has seen a shift in policy focus, moving away from the large-scale COVID-19 green stimulus packages. The flagship Jobs for Nature programme, which provided significant green jobs and ecological restoration, concluded its dedicated funding in June 2025, leaving a positive legacy of restored wetlands, increased biodiversity, and skills development, particularly within Māori and Pacific communities. The State Sector Decarbonisation Fund has also concluded in its initial form, though its impact—replacing fossil fuel boilers in public buildings—is a clear structural transition measure. However, recent economic stabilisation efforts, such as the Budget 2025 Investment Boost, are broad-based tax incentives for business investment in productive assets, and are not explicitly targeted or conditioned for green outcomes.