The Bank of Russia has joined the Network for Greening the Financial System (NGFS), as the central bank and supervisory body celebrates its second birthday this month.
The NGFS, which started in December 2017 with eight founding central bank members, has grown quickly to 54 members and 12 observers.
Since October 2019, the Inter-American Bank (IDB), the International Organization of Securities Commissions (IOSCO) and the Nordic Investment Bank have joined as observers.
And there have been eight new members including the Bank of Japan.
In a statement, the Bank of Russia, headed by Elvira Nabiullina, said it was giving “increased attention to climate risks”. Russia formally adopted the Paris climate agreement in September.
The Bank of Russia’s Financial Stability Review for the second and third quarters of 2019 noted that: “climate risks may have a significant impact on financial institutions’ activities and financial stability in general” and gave an overview of related worldwide activity including the NGFS and climate change reporting framework Task Force on Climate-related Financial Disclosures.
Focusing on climate risks in Russia, the Financial Stability Review said approaches were at an early stage and that further development of climate risks in assessment practices were needed in the country.
“Strengthening of requirements on climate-related disclosures is needed, as well as development of supervisory reporting and aggregated database on disasters. Stress tests of extreme weather conditions risks for insurance companies should be implemented. The necessity for these actions rise as the climate conditions worsen,” it said.
It comes as another NGFS member, the Swiss National Bank (SNB), reportedly faces political pressure to divest its $800bn balance sheet out of fossil fuel investments.
A bill in 2018, proposed by the Green Party in the Swiss parliament, to force the SNB to divest fossil fuels, was rejected.
It has been reported that the centre-left Social Democrats and the Greens are proposing a similar motion in the Swiss parliament again.