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Launch of the 6th annual Global Public Investor: sustainability panel discussion
Geographic inequality and the rise of economic hubs
As 1,500 private jets flew into Davos to discuss climate change, the Central Banks' and Supervisors' Network for Greening the Financial System was meeting in Mexico. The network believes climate change is not only a threat to the environment; it also jeopardises the world's financial system, writes Danae Kyriakopoulou.
Ensuring climate-related risk does not translate to financial instability is a key concern for central banks, but not an exclusive one. Central banks are tasked with safeguarding prosperity, which in turn requires that prosperity be generated sustainably. Monetary authorities should lead by example by supporting the transition to lower-carbon economies in their roles as investors. One controversial approach would be for central banks to take climate risks into account in the purchases that form part of their QE programmes.
Central banks' remits have changed profoundly since the 2008 financial crisis, notably – and sometimes controversially – in relation to their monetary policy practices and quantitative easing policies. Their remits are beginning to expand into another, unexpected field: climate change. The recognition of climate-related disruption as a source of financial risk is propelling this expansion, and central banks can leverage their influence through their capacity as both regulators and as reserves managers.
ESG series: Developing the UAE as a centre of green finance
OMFIF-ADBI joint seminar on sustainable finance in Asia
Islamic finance series: SRI and green sukuks
DZ BANK international capital markets conference
In Conversation: Rodney Irwin, WBCSD, and Lauren Rogge, EY
