Climate Change: Managing Financial Risks and Green Finance Initiatives
01 - 01 Jan, 1970
To Be Determined;
In 2022, it is no longer a question of whether central banks should address climate change, but rather how and when.
For central banks, a key question is how to implement climate change at a strategic level when it affects the whole central bank, yet in a variety of specialised and localised ways. As market players central banks buy and sell assets which have ESG ratings; as supervisors they assess and address the financial risks from climate change; and lastly as institutions they have a carbon footprint.
Yet, questions remain around how to incorporate climate change into existing mandates, objectives, policies and strategic plans.
By the end of the course, participants will be able to:
- Incorporate climate change and sustainability into strategic plans
- Understand the interaction of climate policy and central bank mandate
- Assess the impact on domestic and foreign treasury operations
- Gain insight into scenario analysis and stress testing climate risks
- Understand how central banks are locating and resourcing climate change initiatives
This course is designed to equip central bankers to meet these challenges. Each day will feature three hours of expert-led Live Content to maximise the opportunity to share and learn. The chair will ensure participants have opportunities to network throughout the course, with time set aside for a workshop on implementing key learnings.
Course introduction session led by the chair
- Introductions and welcome from the chairperson
- Overview of the training course
- Discussion of the delegate expectations
Climate risk and the ESG agenda: impact and implications for central banks
- Climate change as the emerging source of local and systemic instability
- Impact and implications for monetary policy strategy, conduct and implementation
- Overview of new roles and responsibilities for central banks in the areas of green finance and ESG
- Discussion: how are central banks tackling climate risk in the delegates’ home jurisdictions?
Integrating climate change and green finance into central bank mandates
- Do climate-related risks and mitigation policies fit into central bank mandates and objectives?
- Should central banks be mandated to play a role in greening the financial system?
- Comparing mandates and policy tools in high-income regions vs. developing economies
- Discussion: what are the risks of overstretching central banks’ mandates?
Greening central banks’ internal operations
- What are central banks doing to green their internal operations?
- Key sustainability goals and targets for cutting central banks’ environmental footprints
- Successes and challenges from central banks with advanced green initiatives
- Discussion: which areas are participants’ own organisations focused on greening?
Adapting monetary policy operational frameworks to reflect climate-related risks
- The challenges of assessing the consequences for monetary policy effectiveness
- Identifying the options that a central bank could consider
- Assessing potential climate-related adjustments to monetary policy operational frameworks
- Discussion: is disclosure a prerequisite for other potential adjustments?
Sustainable investing: key challenges and opportunities
- Emergence of sustainable investing as the new normal
- Impact of ESG mandate on the investment strategies of central banks
- Tips for balancing financial and sustainability requirements
- Criteria for assessing the suitability of available products and services
Climate stress testing and modelling
- Climate change: risks for financial stability
- Climate change: the supervisory approach
- Climate change stress testing: design and conceptual issues
- Case studies: lessons and some results from climate change stress testing
Climate change and the data challenge
- Overview of climate-related data needs, availability and gaps
- Key environmental metrics identified by central banks
- Discussion: what challenges does data pose for participants own organisations?
Toolkit for assessment of climate-related physical risks
- Dimensions of physical risk assessment
- Data sources and geospatial tools for physical risk analysis
- Experimental indicators for physical hazards
Green taxonomies and disclosure requirements
- The EU green taxonomy and its applications
- Disclosure requirements linked to the EU green taxonomy
- Estimating the taxonomy-alignment and the exposure to transition risk in financial portfolios
- Discussion: which taxonomies are participants using in their own organisations?
Effective disclosures: improving governance by improving transparency
- Areas of the TCFD framework useful for central banks’ own disclosures
- NGFS Guide on climate-related disclosure for central banks
- Opportunities and challenges of climate disclosures
- Discussion: should central banks lead by example on climate-related disclosures?
Incorporating climate change and sustainability into strategic plans
- Developing a clear strategic view of central banks’ appetite for climate-related risks
- Introducing explicit strategies to support the transition to net-zero
- Liaising and coordinating with supervisors and policymakers
- Case study: a central bank’s strategic plan for climate change
Closing remarks and delegate action plans
Concluding session led by the chair
- Summary of the course
- Discussion of the observed trends and case studies
- Application of learning points in the delegates’ home organisations
- Preparation of action points