A group of eight central banks and financial supervisors (see below) have formed a network to help strengthen the global response to the Paris climate accord and help the financial system to become more environmentally sustainable.
The aim of the group is to, on a voluntary basis, “exchange experiences, share best practices, contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy”.
“Financing the transition to a green and low carbon economy consistent with the ‘well below 2°celsius’ goal set out in the Paris agreement and promoting environmental sustainable growth are among the major challenges of our time,” the banks said in a statement.
They say there are both opportunities and vulnerabilities for financial institutions and the financial system as a whole in responding to environmental and climate challenges.
They cite the role of the G20 Green Finance Study Group and the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD) in encouraging financial institutions to conduct environmental risk analysis and to improve environment- and climate-related information disclosure.
The initiative, dubbed the Network of Central Banks and Supervisors for Greening the Financial System, aims to “enhance the role of the financial system to manage risks and to mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development”.The group is clear that it is a voluntary forum and that its purpose is not to issue binding policy recommendations.
Its objective is not to replicate work conducted elsewhere (e.g. the TCFD, G20) but to build on it “and enrich it where necessary”. All central banks are welcome to join and membership is expected to grow over time.
“The network’s diverse membership will allow for a close coordination between the various ongoing international initiatives on issues of common interests,” the group says in documents hosted by the Monetary Authority of Singapore.
The network will conduct a stock-taking exercise during 2018 and hold a physical meeting early next year. It will also hold a high-level conference focused on climate risk management and supervision on April 6 in Amsterdam, organized by France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), the Bank of England and De Nederlandsche Bank.
Banco de Mexico
Bank of England
Banque de France and ACPR
De Nederlandsche Bank
Monetary Authority of Singapore
People’s Bank of China