The Network for Greening the Financial System (NGFS) will step up capacity-building for its membership, it has revealed in a document setting out its priorities for the next two years.
A new task force has been given the job of identifying good practices on how central bankers and supervisors can be upskilled, and how central banks can develop in-house capacity for training.
Ravi Menon, the NGFS managing director, said the new work programme is designed to ensure the organisation stays relevant to the needs of the NGFS’ expanded base of 114 members and 18 observers. The central banks of Kenya, Egypt, Mauritania and Nigeria are among the institutions to have joined since the start of 2022.
A survey of central banks and finance ministries in the V20 group of climate-vulnerable countries found that almost all wanted more assistance in addressing climate risks. At the time the survey was conducted in 2020, only two respondents said their institutions had undertaken a comprehensive analysis.
Lower-income countries and small states tend to be among those most in need of extra capacity to manage climate risk, and are disproportionately affected by climate change.
The NGFS launched a Climate Training Alliance ahead of the COP26 summit last year to disseminate best practices among central banks, with a particular focus on emerging and developing economies. The alliance is a collaboration with other bodies including the Bank for International Settlements and the UN-convened Sustainable Insurance Forum.
The International Monetary Fund (IMF) has similarly stepped up its capacity-building work on climate risks for central banks and finance ministries. The IMF has joined the NGFS as an observer.
Among the NGFS’ other priorities are developing its work on nature-related financial risks; and accelerating progress on the integration of climate risks into supervision.
The supervision workstream will assess the extent to which financial institutions’ transition plans relate to supervisors’ roles and mandates and could be considered within their supervisory toolkit. It will build on the conclusions of the NGFS report on Capturing risk differentials from climate-related risks, which considered the possibility that banks’ transition plans could inform capital requirements.
The remaining workstreams and taskforces are on scenario analysis, monetary policy and sustainable investment. The mandates of the NGFS’ work in each area can be found on the network’s website.
This page was last updated June 6, 2022
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