On 11 October, to coincide with the Annual Meetings of the International Monetary Fund and the World Bank, the Central Banks and Supervisors Network for Greening the Financial System (NGFS) published its first progress report. The Bundesbank is one of the ten founding members of the network, which was launched at the Paris One Planet Summit in December 2017.

Further efforts are required

Since the network was established, its members have significantly increased their efforts to understand and assess climate and environment-related risks. The NGFS believes that climate-related risks are a source of financial risk. It is therefore within the mandates of central banks and supervisors to ensure the financial system is resilient to these risks. Given that this is a fairly new field of work for central banks and supervisors, the report states that further efforts are required and that new analytical methodologies and supervisory approaches are also needed. The NGFS will continue its work over the coming months and will publish a comprehensive report in April 2019.

The growing importance of green finance

The network now consists of 19 central banks and supervisory authorities as well as five international organisations with observer status. Its members seek to exchange experiences and best practices in order to take greater account of environment and climate-related risks in the financial sector and to promote the transition to sustainable economies. Bundesbank Executive Board member Joachim Wuermeling chairs one of the three NGFS workstreams. Mr Wuermeling also represents the Bundesbank on the NGFS Steering Committee.