The pandemic strengthened the case for proper tail risk identification by demonstrating the impact ESG risks can have on the financial system. A similar perspective is required when addressing financial risks associated with climate change. Last year’s sustainable and responsible investment (SRI) guide encouraged central banks across the globe to lead by example by including sustainability considerations in their portfolio management.
This progress report aims to keep this momentum going by reporting on the steps central banks have taken over the last year, as well as the future objectives needed to speed up the transition towards a carbon-neutral economy.