NGFS publishes 10 recommendations to speed up central banks’ sustainable investment

May 20, 2024|Written by |Network for Greening the Financial System

The Network for Greening the Financial System (NGFS) has published a list of 10 recommendations for central banks to speed up the greening of their investment portfolios.

The NFGS, which includes more than 130 central banks and financial regulators around the world, made the suggestions in a report on sustainable and responsible investment (SRI) in central banks’ portfolio management.

“Many central banks have a role to play as investors,” the report says, stressing that the recommendations are for actions that central banks can take without prejudicing their legal mandates.

In shifting their own investments towards SRI, “central banks can lead by example, foster the development of sustainability risk management in the financial sector, and mobilise mainstream finance to support the transition towards a sustainable economy”, the report adds.

The recommendations include integrating sustainability factors into investment portfolios, setting formal – and public – SRI policies, and enhancing the sustainability expertise among central banks’ own staff.

The NGFS also encourages central banks to “adopt disclosure practices in line with global standards, to foster globally comparable information”, and to look at increasing their exposure to labelled bonds and investees with “credible and ambitious transition plans”.

The report builds on an earlier technical document released by the NGFS in 2019. It includes various case studies of how central banks around the world, from the Netherlands to Malaysia and Argentina, have begun incorporating SRI principles into their portfolio management.

The main report is accompanied by two additional technical documents which suggest ways for central banks to take climate change into account in their investments in equity and corporate bonds, and in sovereign debt.

This page was last updated May 20, 2024

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