Climate change concerns in central banks policies: a commentary
摘要
The threat of climate change on financial stability and the profitability of financial institutions has been gaining momentum. Monetary policies of various central banks headed by the European Central Bank (ECB) and the Bank of England started including climate change considerations in as early as the speeches of Coeure (2018, in: Executive Board of the ECB entitled Monetary Policy and Climate Change), Carney (speech on 23 September 2019, “Remarks given during the UN Secretary General’s Climate Action Summit 2019”. https://www.bankofengland.co.uk/-media/boe/files/speech/2019/remarks-given-during-the-un-secretary-generals-climate-actions-summit-2019-mark-carney.pdf, 2019), and Lagarde (speech entitled “Remarks on the occasion of receiving the Grand prix de l’Economie 2019 from les Echos”, 2020) all the way until 2025 as we show. Many monetary authorities are currently deeply involved in addressing climate considerations into their objectives and future plans (Bank of England, The Bank of England’s Climate Related Financial Disclosure. https://www.bankofengland.co.uk/climate-change/the-bank-of-englands-climate-related-financial-dislosure-2025, 2025; The Bank of England’s Climate Related Financial Disclosure. https://www.bankofengland.co.uk/climate-change/the-bank-of-englands-climate-related-financial-disclosure-2024, 2024; Bank of England Climate Biennial Exploratory Scenario, May, https://green-alliance.org.uk/wp-content/uploads/2022/05/Bank-of-Englands-Climate-Biennial-Exploratory-scenario, 2022) and the ECB (ECB, Climate Scenarios: What, Why and How, May 29. https://www.suerf.org/wp-content/uploads/2024/04/Livio-STtaca-ECB-2024-05-29-Wien-event.pdf, 2025; ECB provides details on how it aims to decarbonise its corporate bond holdings. https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220919~fae53c59bd.en.html, 2022; Elderson Frank, Deepening Our Commitment to Confronting the Climate and Nature Crises, 4 July, https://www.ecb.europa.eu/press/key/date/2025/html/ecb.sp250704~167d74e3c3.en.html, 2025; Mongelli FP et al, Why do we need to strengthen climate adaptations? Scenarios and financial lines of defense ECB Working Paper Series No 3005, https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp3005~35f938a452.en.pdf, 2024; Breckenfelder et al, The Climate and the Economy. ECB Working Paper Series, No 2793, March. https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp2793~7969efec4f.en.pdf, 2023) based on a mounting evidence that climate change affects financial stability, inflation and real output. This commentary re-assesses the readiness of central banks to address and alleviate the impacts of climate change on economic activity and financial stability. Its findings based on surveying the recent practices of a group of 16 central banks from the industrial, emerging and developing markets indicate that while several monetary authorities exhibit environmental and climate change stewardship in their operations and some have well-established green banking practices, the attempts for many central banks around the globe are in planning stages which prevents monetary policy-makers in some countries from correctly identifying climate related shocks, their distribution and persistence. Thus, the commentary calls for redesigning monetary policy objectives to further enhance green central bank practices.