Central banks are starting to integrate climate risk management into monetary policies globally. Central Banks and Supervisors have establised a working group called “The Central Banks and Supervisors Network for Greening the Financial System (NGFS)”.
This is a voluntary group, but the idea to share best practices and to contribute to the development of environmental and climate risk management in the financial sector. One of the targets is also to support the transition towards sustainable ecnonomy and green finance.
According to the network, climate-related risks are a source of financial risk. It is therefore within the mandates of Central Banks and Supervisors to ensure the financial
system is resilient to these risks.
Some Central Banks have also started to scale up green finance by accounting for climate and environment-related factors in their investment strategies. According to the network findings some Central Banks, regulators and local authorities have introduced incentives for banks to increase green lending and for issuers to issue green bonds.
The Secretariat is permanently provided by Banque de France and the chairman is Mr Frank Elderson, member of the Governing Board of De Nederlandsche Bank.
The network has structured its work into three dedicated workstreams: Supervision (chaired by Ma Jun from the People’s Bank of China), Macrofinancial (chaired by Sarah Breeden from the Bank of England) and Mainstreaming green finance (chaired by Joachim Wuermeling from the DeutscheBundesbank).
The Network members include:
- Banco de España
- Banco de México
- Bank Al Maghrib
- Bank of England
- Bank of Finland
- Bank Negara Malaysia (Central Bank of Malaysia)
- Banque Centrale du Luxembourg
- Banque de France / Autorité de Contrôle Prudentiel et de Résolution (ACPR)
- Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
- De Nederlandsche Bank
- Deutsche Bundesbank
- European Central Bank
- Finansinspektionen (Swedish FSA)
- Japan FSA
- Monetary Authority of Singapore
- National Bank of Belgium
- Oesterreichische National Bank
- the People’s Bank of China
- the Reserve Bank of Australia