The Green Central Banking Scorecard, produced by Positive Money and Green Central Banking, scores and ranks the full range of green policies and initiatives adopted by G20 central banks. The analysis is based on a literature review, expert consultations, and bilateral interactions with central bankers and supervisors.
Incremental progress is being made by many central banks, and for the first time one country (France) has been awarded a grade higher than C. However, the world’s largest economies still have a long way to go.
France once again tops the league table, thanks to aligning its non-monetary portfolios with the 1.5ºC target and excluding fossil fuels.
France is followed by Italy, Germany and the European Central Bank (ECB), reflecting a commitment from the ECB to limit the amount of carbon intensive assets financial institutions can use as collateral when borrowing from it. The ECB has also pledged to decarbonise its own assets by aligning its corporate bonds with 1.5ºC global warming, and suggestions that it may implement a green lending scheme, which offers cheaper funds for green activities.
Brazil has dropped from second place to joint sixth due to the central bank’s relatively slow progress in implementing its formal commitments, and India has also fallen two places to twelfth position.
The US also slips down the table, after another year of minimal progress from the Federal Reserve, despite a commitment to conduct a climate scenario analysis in 2023.
Some progress has been made on Research and Advocacy, with 17 of the G20 countries now having achieved full marks, compared to 14 in 2021, reflecting how climate is now considered an important issue for central banks.
Regulators increasingly recognise the need for tools to manage climate risks, with extensive scenario analyses looking at how financial institutions are exposed to these risks. Some central banks are building climate into their supervision of financial institutions.
Switzerland is not included in the scorecard as it is not a G20 country. However, the Swiss National Bank is systemically important to the global financial system, meaning that green policies it implements could have relatively high global impact. Since the last edition, the Swiss Financial Market Supervisory Authority has introduced mandatory disclosures of climate-related financial risks and conducted a pilot climate scenario analysis on two banks. In this edition, Switzerland would score 26 points, putting Switzerland in 11th place, down from eighth in the previous edition
This edition was published in November 2022.
Rank
Country
Aggregate Score(out of 130)
Grade(A+ to F)
Research and Advocacy(out of 10)
Monetary Policy(out of 50)
Financial Policy(out of 50)
Leading by Example(out of 20)
1
France
70
B-
10
12
31
17
Central Bank/Supervisor
Banque de France, Autorité de Controle Prudentiel et de Résolution, European Central Bank and European Banking Authority
ECB will limit the share of assets issued by entities with a high carbon footprint that can be pledged as collateral (formal commitment, implementation in 2024).
ECB purchased green bonds under both the corporate and public sector purchase programmes
Climate change risks incorporated into haircuts applied to corporate bonds used as collateral (under discussion at ECB)
Eurosystem will implement a set of common minimum standards detailing how national central banks’ in-house credit assessment systems should include climate-related risks in their ratings (formal commitment, implementation in 2024)
Financial Policy
31 out of 50
High-impact
Climate-related quantitative and qualitative restrictions on banks’ portfolios (under discussion at ECB)
EBA published binding standards on climate risks within balance sheets, mitigating actions, green asset ratio and banking book taxonomy alignment ratio, and ESG risks
ECB will develop new statistical indicators to assess the carbon footprints of banks, as well as their exposures to climate-related physical risks (formal commitment, implementation in Q4 2022)
ECB will limit the share of assets issued by entities with a high carbon footprint that can be pledged as collateral (formal commitment, implementation 2024)
Advanced ESG data model in the Centralised Securities Database (CSDB), identifying all types of sustainable bonds; will rank sustainability level as “self labelled”, “verified by a second party” and “fully certified”
ECB will make environmental sustainability disclosures a condition of eligibility in collateral purchases (formal commitment, implementation in 2026)
ECB will make environmental sustainability disclosures a condition of eligibility in the corporate sector purchase programme (formal commitment, implementation in Q1 2023)
ECB purchased green bonds under both the corporate and public sector purchase programmes
Climate change risks incorporated into haircuts applied to corporate bonds used as collateral (under discussion at ECB)
Eurosystem will implement a set of common minimum standards for how national central banks’ in-house credit assessment systems should include climate-related risks in their ratings (formal commitment, implementation in 2024)
Financial Policy
31 out of 50
High-impact
Climate-related quantitative and qualitative restrictions on banks’ portfolios (under discussion at ECB)
Banks are required to integrate climate and environmental risks into risk management practices
Supervisory climate risk stress tests for banks (2022 results)
Microprudential climate-related capital-based measures (under discussion at ECB and EBA)
Macroprudential climate-related capital-based measures (under discussion at ECB and EBA)
Requirement for banks to publish Paris-compatible transition plans (under discussion at ECB)
Low-impact
Banca D’Italia document on supervisory expectations for climate-related and environmental risks in corporate strategies, governance and control systems, risk management frameworks and disclosure requirements
Information gathering by Banca D’Italia on environmental risk awareness in less significant banks and ESG integration in asset management companies
EBA published binding standards on climate risks within balance sheets, mitigating actions, green asset ratio and banking book taxonomy alignment ratio, and ESG risks
ECB economy-wide climate stress test (2021 results)
EBA ran a consultation to incorporate ESG risks into the governance, risk management and supervision of credit institutions and investment firms
ECB will develop new statistical indicators to assess the carbon footprint of banks, as well as their exposures to climate-related physical risks (formal commitment, implementation in Q4 2022)
ECB will limit the share of assets issued by entities with a high carbon footprint that can be pledged as collateral (formal commitment, implementation in 2024)
Advanced ESG data model in the Centralised Securities Database (CSDB), identifying all types of sustainable bonds; will rank sustainability level as “self labelled”, “verified by a second party” and “fully certified”
ECB will make environmental sustainability disclosures a condition of eligibility in collateral purchases (formal commitment, implementation in 2026)
ECB will make environmental sustainability disclosures a condition of eligibility in the corporate sector purchase programme (formal commitment, implementation in Q1 2023)
ECB purchased green bonds under both the corporate and public sector purchase programmes
Climate change risks incorporated into haircuts applied to corporate bonds used as collateral (under discussion at ECB)
Eurosystem will implement a set of common minimum standards for how national central banks’ in-house credit assessment systems should include climate-related risks in their ratings (formal commitment, implementation in 2024)
Financial Policy
30 out of 50
High-impact
Climate-related quantitative and qualitative restrictions on banks’ portfolios (under discussion at ECB)
EBA published binding standards on climate risks within balance sheets, mitigating actions, green asset ratio and banking book taxonomy alignment ratio, and ESG risks
ECB economy-wide climate stress test (2021 results)
EBA ran a consultation to incorporate ESG risks into the governance, risk management and supervision of credit institutions and investment firms
ECB will develop new statistical indicators to assess the carbon footprint of banks, as well as their exposures to climate-related physical risks (formal commitment, implementation in Q4 2022)
Sustainable investment policies in Bundesbank’s euro- denominated non-monetary policy portfolio includes tilting based on carbon risk rating and greenhouse gas intensity
Disclosure of Bundesbank’s progress towards operational environmental goals in environment reports
Education for young people, high-school teachers and students, and university students on climate-related financial risk and green finance within Bundesbank, and at Euro20+ events
Eurosytem’s BIS innovation hub to build a database of corporate climate-related disclosures (formal commitment)
Green finance dashboard hosted by Bundesbank; tracks national emissions and green finance metrics
Eurosystem has contracted ESG rating agencies Carbon4 and ISS ESG to integrate climate risk into the non-monetry policy portfolio
Climate-related disclosures of euro-denominated non-monetary policy portfolios by Deutsche Bundesbank (2022 results)
Creation of green finance steering committee
Contributed to the development of the EU taxonomy; scorecard points suspended due to inclusion of gas
ECB will limit the share of assets issued by entities with a high carbon footprint that can be pledged as collateral (formal commitment, implementation in 2024)
Advanced ESG data model in the Centralised Securities Database, identifying all types of sustainable bonds; will rank sustainability level as “self labelled”, “verified by a second party” and “fully certified”
ECB will make environmental sustainability disclosures a condition of eligibility in collateral purchases (formal commitment, implementation in 2026)
ECB will make environmental sustainability disclosures a condition of eligibility in the corporate sector purchase programme (formal commitment, implementation in Q1 2023)
ECB purchased green bonds under both the corporate and public sector purchase programmes
Climate change risks incorporated into haircuts applied to corporate bonds used as collateral (under discussion at ECB)
Eurosystem will implement a set of common minimum standards detailing how national central banks’ in-house credit assessment systems should include climate-related risks in their ratings (formal commitment, implementation in 2024)
Financial Policy
28 out of 50
High-impact
Climate-related quantitative and qualitative restrictions on banks’ portfolios (under discussion at ECB)
Microprudential climate-related capital-based measures (under discussion at ECB and EBA)
Macroprudential climate-related capital-based measures (under discussion at ECB and EBA)
Requirement for banks to publish Paris-compatible transition plans (under discussion at ECB)
Low-impact
EBA published binding standards on climate risks within balance sheets, mitigating actions, green asset ratio and banking book taxonomy alignment ratio, and ESG risks
ECB ran a public consultation on its guide on climate and environmental risks
ECB will develop new statistical indicators to assess the carbon footprint of banks, as well as their exposures to climate-related physical risks (formal commitment, implementation in Q4 2022)
ECB conducted a review on how credit ratings reflect climate risk and is urging rating agencies to be more transparent and ambitious on climate risk
Supervisory assessment of institutions’ climate-related and environmental risks disclosures
Improvement of the availability and quality of climate data to better identify and manage climate-related risks and opportunities (formal commitment)
Sustainable and responsible investment practices in the management of their non-monetary portfolios (referred to here)
ECB and EBA annual environmental statement which tracks towards achieving Paris Agreement-aligned corporate sustainability targets by 2030 in areas including energy, procurement and biodiversity
Requirement for financial institutions to disclose transition plans (formal commitment as part of sustainability disclosure requirements (SDR): “As standards for transition plans emerge, the government and regulators will look to incorporate these into UK regulation”)
Mandatory TCFD disclosure for banks and insurers, and commitment to SDRs
Condition on rural credit in the Amazon whereby borrowers must show proof of environmental compliance (study on impact on deforestation – criteria have recently been expanded and strenghtened)
Green Bureau of Rural Credit and incentives for green rural credit (formal commitment – latest BCB report refers to this as the Sustainable Rural Credit Bureau)
Low-impact
Sustainability criteria in the management of international reserves and monitoring of CO2 emissions to assess portfolio’s carbon profile.
Public consultation on sustainability criteria applicable to rural credit operations
Financial institutions are required to implement a policy for socio-environmental responsibility “consisting of a set of principles and guidelines involving social, environmental and climate related aspects that orientate business conduct, company activities and relations with stakeholders” (updated regulation including climate)
Inclusion of climate risk scenarios in new and improved system-wide stress tests (formal commitment)
BCB surveying financial institutions on incorporation of climate risks into risk management process, including exposure assessments, climate scenarios, stress testing and internal governance
CMN Resolution No. 4,968: financial institutions are required to integrate ESG into their internal control systems (referred to in bilateral interactions)
Creation of new indicators to monitor social, environmental, and climate risk (formal commitment)
Public consultation on regulation on risk management and social, environmental and climate responsibility
Leading by Example
7 out of 20
High-impact
N/A
Medium-impact
N/A
Low-impact
Creation of the sustainability economy committee which co-ordinates external and international initiatives, projects and activities in different areas of the BCB in sustainability
BCB goal of carbon neutrality in operations, including sustainable logistics management plan (2019-2020, 2021-2022) which implemented sustainability in the bank’s waste management
Carbon emission reduction facility – banks must offer reduced interest rates for loans to pollution control facilities, environmental protection and infrastructure, renewable energy etc (fully implemented); scorecard points suspended due to credit guidance towards coal under the “special central bank lending to support the clean and efficient use of coal”
Interest rate provided to banks on required reserves may be increased if the bank is assessed to be greener in the PBoC’s macroprudential assessments (referred to here)
Low-impact
PBoC issued notice on issues relating to improving environmental protection in credit policy, which provided guidance for banks on “how to better include environmental variables in credit decisions” (referred to here)
Banks and insurance institutions are required to gradually reduce the carbon intensity of asset portfolios in an orderly manner and finally realise the carbon neutrality of asset portfolios (as per green finance guidelines)
Banks are required to incorporate environmental risks into risk management and governance processes (see, for example, 2012 Notice on Issuing Green Credit Guidelines, referred to here)
Banks are required to shift lending towards environmentally friendly projects (see, for example, 2007 Opinions on Implementing Environmental Protection Policies and Rules and Preventing Credit Risks and the 2012 Notice on Green Credit Guidelines referred to here)
Banks are required to shift lending away from unsustainable projects (see, for example, 2007 Opinions on Implementing Environmental Protection Policies and Rules and Preventing Credit Risks and the 2012 Notice on Green Credit Guidelines referred to here; scorecard points temporarily suspended due to China’s current domestic credit guidance towards coal production
Lower risk weights for green assets (under discussion; referred to here)
Low-impact
PBoC conducted stress tests of 21 commercial banks and two development banks; only focused on the effects of increased emissions costs on asset quality and capital adequacy levels; results published
CBIRC issued opinions on energy efficiency and emission reductions in credit extension, which provided “specific guidance on how banks can contribute to national environmental goals” (referred to here)
CBIRC’s Notice of Submission of Green Credit Statistics requires that the 21 main banks report green credit statistics (referred to here)
CBIRC’s Notice of the Key Performance Indicators of Green Credit Implementation, which established “quantitative and qualitative indicators for assessing performance” (referred to here)
CBIRC issued guidelines on incorporating ESG requirements into the entire credit granting process (referred to here)
Banks and insurance institutions are required to establish green finance organisation and coordination mechanisms, and are encouraged to carry out innovaiton in green finance (under green finance guidance)
Banks and insurance institutions are encouraged to incorporate ESG requirements into management processes, disclosures and interaction with stakeholders (under green finance guidance)
CBIRC issued guidelines on environmental risk management systems (referred to here)
Inclusion of green bonds in the green finance evaluation plan, which will assess the share of green bonds in financial institutions’ total assets
Banks and insurance institutions are guided to actively support the green and low-carbon development efforts under the Belt and Road initiative (under green finance guidelines)
Green Bond Endorsed Projects Catalogue (2021): PBoC, China Securities Regulatory Commission and National Development and Reform Commission announced updated green bond guidelines which exclude “clean coal”
Common ground taxonomy: comparison of EU and China taxonomies, to harmonise cross border green investment; can be used as a voluntary reference by market participants when issuing or trading green financial products.; based on Green Bond Endorsed Projects Catalogue, so excludes coal projects
Climate response financing operations provides 0% interest funding for investments and loans that contribute to Japan’s actions to address climate change
Low-impact
Loan support programme offers loans at below market rate to financial institutions to support priority lending sectors including environment business (downgraded from medium impact as the wording is vague and the environment portion of this has effectively been replaced by the scheme above)
Financial Policy
14 out of 50
High-impact
N/A
Medium-impact
FSA guidance toward green sectors (formal commitment, referred to here)
Mandatory climate risk disclosure (under discussion, referred to here)
FSA conducted a consultation on the code of conduct for ESG-rating organisations and data organisations on transparency and comparability of evaluation methdologies
BI working in coordination with government departments to develop a carbon calculator, to promote climate related disclosures (formal commitment, referred to in bilateral interactions)
BI working in coordination with government departments to conduct a climate-related transition risks assessment of the Indonesian economy (formal commitment, referred to in bilateral interactions)
BI developing a green data centre to capture and record emissions of banks and debtors (formal commitment, referred to in bilateral interactions)
BI is developing a framework on the regulatory and development direction of the green money market in Indonesia (formal commitment, implementation in 2024)
BI preparing a new framework for developing SMEs into green SMEs (formal commitment; referred to in bilateral interactions)
BI Institute adopted climate-related issues into the curriculum for internal capacity-building
Socially responsible investment principles followed in non-monetary portfolios, in line with the main principles of security, liquidity and return (referred to here and in bilateral interactions)
BI to publish disclosures of emissions in accordance with IFRS sustainability disclosure standards (formal commitment)
BI developing framework for greening operations in energy and buildings (formal commitment)
BoI developing a new green cash management framework (formal commitment)
Guidelines and incentives for green bond issuance (referred to here and here)
BI and OJK coordinated seminars and workshops for bankers and supervisors on environmental risk assessment and green finance (referred to here)
Programme intended to present success stories of innovative green finance (formal commitment; referred to here as “scalable green programme development” and here as “real programme development”)
National campaign for sustainable finance (formal commitment; referred to here and here)
10
Canada
28
D
10
2
14
2
Central Bank/Supervisor
Bank of Canada and Office of the Superintendent of Financial Institutions
Climate considerations in BoC’s collateral framework eligibility criteria and haircut application (under discussion, referred to in bilateral interactions)
Framework for climate considersations in BoC’s asset purchase programmes (under discussion, referred to in bilateral interactions)
Low-impact
Consultation with market participants on greening the BoC’s market operations (formal commitment, implementation in autumn 2022)
Inclusion of data on individuals and businesses sanctioned by the Federal Environmental Protection Agency in credit analysis (under discussion)
Banco de Mexico is considering expanding the exclusion criteria for investment in international reserves to environmental considerations (under discussion)
Banco de Mexico is including ESG evaluation in the risk management framework of international reserves
Financial Policy
4 out of 50
High-impact
N/A
Medium-impact
Measures related to climate and environmental disclosure (under discussion)
Manadatory incorporation of climate into risk management practices of commercial and development banks (under discussion)
Low-impact
Climate scenario analysis of the financial system (formal commitment)
Banking sustainability protocol: voluntary commitment to sustainable development by the members of the Asociación de Bancos de México
Sustainable finance committee created a group on ISSB draft standards to promote implementation of financial disclosure standards
Leading by Example
5 out of 20
High-impact
N/A
Medium-impact
N/A
Low-impact
Banco de Mexico is leading a financial education and capacity building program on ESG disclosures and climate risk analaysis (referred to here)
Banco de Mexico has taken actions to reduce electricity consumption, water consumption, paper consumption, and promote hybrid vehicles and recycling
Creation of a sustainable finance committee, an umbrella organisation of Ministry of Finance, Banco de Mexico and financial agencies which engages with the private sector and promotes green finance
Incorporation of SRI and ESG criteria into fixed-income holdings in own portfolios (referred to here and in bilateral interactions)
Develop definitions and standards for green loans, bonds, and infrastructures (under discussion); one of the sustainable finance committee’s working groups is called “sustainable taxonomy” (referred to here)
Consultative discussion paper assessing the progress of regulated entities in managing climate risk, covering governance, strategy, risk management and disclosure
Leading by Example
1 out of 20
High-impact
N/A
Medium-impact
N/A
Low-impact
Creation of a sustainable finance group to coordinate regulatory initiatives in the areas of sustainable finance and climate risk
India’s finance ministry working to develop a sustainable finance taxonomy, supported by the RBI (referred to here; formal commitment)
13
South Korea
19
D-
10
1
6
2
Central Bank/Supervisor
Bank of Korea, Financial Supervisory Service and Financial Services Commission
Bank of Korea to expand supply of green funds to SMEs through the financial intermediated lending support facility (under consideration)
Low-impact
Bank of Korea to accept green bonds as eligible collateral (under consideration)
Financial Policy
6 out of 50
High-impact
N/A
Medium-impact
FSC has issued a declaration of support for TCFD and outlined a plan to make ESG disclosures mandatory for all Kospi-listed firms (formal commitment to mandatory disclosure)
FSC and state-backed financial institutions launched “a joint consultative body on green finance in order to provide sufficient funds to green industries and create synergetic effects towards the goal of promoting green finance”
Leading by Example
2 out of 20
High-impact
N/A
Medium-impact
N/A
Low-impact
Bank of Korea to establish a carbon reduction target and action plan in its operations (formal commitment)
BoK to disclose its carbon emissions for non-monetary portfolios (formal commitment)
Regulatory incentives for ESG financing (under discussion), including differentiated criteria for banks depending on exposure to climate-related financial risks (under discussion)
Low-impact
Bank of Russia to run stress tests on the impact of climate-related transition risks on major Russian exporters and the financial sector (formal commitment)
Development of recommendations for financial intermediaries on integration of climate-related risks into investment activities (formal commitment)
Creation of a databse on the occurrence and impact of natural disasters for insurance firms (formal commitment)
Establishment of own corporate sustainability development policy including: reducing resource consumption, increasing energy efficiency, implementing programmes for employees in line with social UN sustainable development goals (formal commitment)
Working group on sustainable development financing to participate in developing sustainable taxonomies (formal commitment)
Developed standards on the issuance of green bonds (revised in April 2020); also currently developing eligibility criteria for sustainable development projects, as well as basic guidelines for green instruments (referred to here)
Established a working group responsible for financing sustainable development projects (referred to here, although unclear exactly what this means or entails)
15
Australia
17
D-
10
0
4
3
Central Bank/Supervisor
Reserve Bank of Australia and Australian Prudential Regulation Authority
BRSA stress test and scenario analysis which incorporates climate risk (formal commitment, implementation in December 2025).
BRSA to standardise ESG practices within regulatory infrastructure (formal commitment, implementation in December 2025)
BRSA to encourage sustainable loans through incentive mechanisms within the microprudential regulatory framework (vague how this will be done, formal commitment, implementation in 2025)
BRSA to increase of bank’s climate risk management capacity through corporate structuring, risk analysis, risk management plans, reporting and elimination of data gaps (formal commitment, implementation in December 2023).
BRSA creation of data infrastructure at sector, sub-sector, location and firm levels to analyse climate-related financial risks (formal commitment, implementation in December 2022)
BRSA raised LTV ratio from 80% to 90% for housing with class A energy performance certificate and 85% for housing with class B (this measure was only in place for a few months before all LTV ratios were raised in response to Covid-19)
Leading by Example
2 out of 20
High-impact
N/A
Medium-impact
N/A
Low-impact
BRSA preparation of a national green taxonomy (formal commitment, implementation in December 2023)
BRSA created the sustainable bank working group (referred to here)
France
Italy
Germany
European Union
United Kingdom
Brazil
China
Japan
Indonesia
Canada
Mexico
India
South Korea
Russia
Australia
United States
Turkey
South Africa