The Institute of International Finance, the high-level Washington-based membership body, says it wants to collaborate on issues like data gaps and scenario analysis with the central banks’ Network for Greening the Financial System (NGFS).
The institute is chaired by Axel Weber, the chairman of UBS and its board includes senior figures from the likes of Goldman Sachs, Macquarie Group, BBVA, Barclays and HSBC. It is headed up by Tim Adams, the former Under Secretary for International Affairs at the US Treasury.
HSBC’s group head of strategy and global head of sustainable finance, Daniel Klier, chairs its Sustainable Finance Working Group.
The working group has written to NGFS chairman and Dutch central bank board member Frank Elderson welcoming its first comprehensive report on climate change and financial risk, calling it a “landmark document”.
In the letter, the institute says it shares the central banks’ view that climate-related risks are a source of financial risk and thus within the scope of central banks. The letter praises the growth of the NGFS membership, but also notes that there are some notable gaps, saying “some central banks and supervisory agencies still seem reticent to fully commit to the idea”.The NGFS 42-strong membership includes the likes of the Bank of England, the People’s Bank of China and Banque de France, however the US Federal Reserve is not a member, and there is a heavy presence of developed countries.
The IIF offers to support the NGFS’s efforts to ensure that all major financial centres are represented in its work. Its 450 member institutions, includes banks, insurance companies, sovereign wealth funds and central banks, such as the Banco Central de Chile.
In the letter, the IIF also proposes regular communication with the NGFS, suggesting a first meeting on October 17, alongside the IMF/World Bank Meetings and the IIF’s Annual Membership Meeting.
A number of collaborations are proposed, for example “pooling public and private resources in areas such as data collection and scenario analysis”.
The sustainability working group also offers to provide industry input into the NGFS’s activities, such as developing a supervisory handbook on climate-related risks and it encourages the NGFS to explore the links between climate change and monetary policy.