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Cabinet paper

Cabinet Paper: DEV-21-SUB-0191: Establishing a Crown Responsible Investment Framework

Issue date: 
Wednesday, 19 January 2022
Version note: 

Some parts of this information release would not be appropriate to release and, if requested, would be withheld under the Official Information Act 1982 (the Act). Where information has been withheld, no public interest has been identified that would outweigh the reasons for withholding it.

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Document Date: 
Thursday, 16 Sep 2021
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Ministerial Portfolio: 

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Only some of this Cabinet paper is extracted below in HTML. If you require a full HTML version please contact [email protected] and cite DEV-21-SUB-0191 as a reference.

Cabinet Paper: DEV-21-SUB-0191: Establishing a Crown Responsible Investment Framework


1This paper seeks agreement to issue a Crown Responsible Investment Framework (the Framework) specific to the largest Crown Financial Institutions (CFIs), with a first iteration targeting carbon emissions of investment portfolios.

Relation to government priorities

2This Framework will give effect to the Labour 2020 Election Manifesto commitment to develop an ethical investment framework for all government-controlled investments so New Zealanders know that all the public’s shared investments are into things we can stand proudly behind.

3It will initially focus on setting climate change expectations, aligning with the Government’s priority for laying the foundations for a better future with a focus on sustainability, and pursuing carbon neutrality.

Executive Summary

4All parts of the Crown’s economic apparatus have a role to play in the transition to a low carbon economy. The CFIs have to varying degrees implemented this mission into their investment strategies, but this is inconsistent and opaque across the portfolio. We recommend that Cabinet endorse the development of a Crown Responsible Investment Framework for the CFIs.

5The Framework is intended to compliment the Carbon Neutral Government Programme (CNGP), setting enduring expectations for the CFIs to measure and reduce the carbon[1] emissions of investment portfolios and exposure to fossil fuel reserves. Offsetting the remaining carbon emissions is not feasible for investment portfolios and we instead challenge the CFIs to show leadership through engaging businesses on carbon transition strategies and considering positive investments into carbon solutions.

6Carbon is a narrow focus of possible Environment, Social and Governance (ESG) factors. However, we consider that starting with this Government priority now enables evolution to other factors in time. We have engaged the CFIs throughoutdevelopment of the Framework and recognise that implementation requires careful consideration of how fiscal and non-fiscal objectives can be jointly achieved.

7For this reason, we intend to issue a principles-based framework through an enduring letter of expectations to the CFIs. This allows for the CFIs to respond with how they will give effect to the expectations, enabling Ministerial and public scrutiny on the ambition to support the transition. We are satisfied that the initial response from the CFIs will create the required transparency and is consistent with the Paris Agreement and Zero Carbon Act requirements.


  1. [1] Throughout this Cabinet paper, carbon emissions represent all greenhouse gas emissions, with carbon dioxide (CO2) being the predominate gas. The CFIs use CO2 equivalent, which captures the greenhouse gases which contribute to climate change (CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3). CO2 equivalent or “CO2e” means the number of metric tons of CO2 emissions with the same global warming potential as one metric ton of another greenhouse gas.


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Last updated: 
Wednesday, 19 January 2022