"Climate change must be a foreign policy priority," the New Zealand prime minister said in a speech to the Lowy Institute in Sydney on Thursday.
Well-founded concerns over the militarisation of the Pacific should be matched with a focus on the violence of climate change, she said.
"All of this needs to happen because ultimately, this is our home," Ms Ardern said.
"And that makes you our cousins.
"But more importantly, over many years, it has made you our friend."
She referred to Australia as New Zealand's largest trading partner, its only formal ally, its largest market for foreign investment and the place where 40 per cent of foreign arrivals in New Zealand landed in 2019.
"It's lucky we like you so much," she said.
"We share our people, our problems and our solutions.
"We won't always agree, and nor should we.
"But it's true that in the messy world we live, friendship matters."
New Zealand had committed $1.3 billion to climate change, with at least 50 per cent of that spend going to the Pacific, she said.
The Pacific Island Forum could play a role establishing climate mitigation projects where foreign aid could be directed, she said.
Ms Ardern and Prime Minister Anthony Albanese will attend the forum in Fiji next week.
"Not every external aid and development donor will have the capability to access our neighbours individually," she said.
"We need to look to the role we can play to bring in that support on the terms the Pacific sets, and the PIF is a great way to do that."
Ms Ardern said the increasingly contested global environment, financial pressures and climate change made for a bleak outlook, but opportunities were available for Australia and New Zealand.
"In a word, it's grim out there," Ms Ardern said.
"But ... I am an optimist at heart and remain so.
"The pressures we face present, yes, challenges but also opportunities ... if we pull, on our own terms, in the same direction."
Ms Ardern also met with NSW Premier Dominic Perrottet on Thursday and expressed her condolences over the state's flood crisis.
Meeting for the first time, the pair discussed the challenges posed by extreme weather events and adaptation, adding they valued the ability to share information and personnel in times of need.
Ms Ardern will see Mr Albanese on Friday after they met briefly after the Australian federal election in May.
The leaders' meeting is expected to cover labour shortages, economic links, regional security, Indigenous cooperation, migration, economic recovery and climate change.
Both have recently been overseas, attending a NATO summit in Spain to which Australia and New Zealand were invited as part of the Asia-Pacific partners grouping along with Japan and South Korea.
Ms Ardern arrived in Sydney on Wednesday after spending two days in Melbourne, where she met Victorian Premier Daniel Andrews to discuss COVID-19 management, healthcare system pressures and rail infrastructure.
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