Bundesbank publishes first climate-related report

The Deutsche Bundesbank has published its first climate-related report. This publication outlines how the Bundesbank incorporates climate-related risks into individual areas of activity within its mandate.

The report is structured around the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which define four pillars for climate-related disclosures: governance, strategy, risk management, and metrics and targets. The G7 and G20 countries last year also endorsed the TCFD recommendations as the basis for climate-related financial risk disclosures.

With this report, the Bundesbank is disclosing the climate impact of its euro-denominated portfolio (euro portfolio), which does not serve monetary policy purposes. This portfolio is used for the investment of certain equity positions, reserves and provisions. At a market value of €10.4 billion (as at 31 December 2021), this portfolio is currently invested exclusively in covered bonds.

Greenhouse gas emissions and other climate-related metrics were calculated as part of the analysis of this euro portfolio. However, the metrics for greenhouse gas emissions only incorporate the emissions caused by the covered bond issuers. The greenhouse gas emissions financed by the covered bonds are not included because data are currently lacking on these emissions. As the data situation improves and allows the financed greenhouse gas emissions to be accounted for, the resulting climate-related metrics calculated for the euro portfolio are likely to be significantly higher.

The Bundesbank is pushing at the national and global level for wider availability of comprehensive, consistent and up-to-date data. Comparability and transparency in climate-related disclosures will further improve its informative value.