NGFS publishes the second edition of its Guide on climate-related disclosure for central banks

Paris, 16 May 2024

Today, the Network for Greening the Financial System (NGFS) published an updated Guide on climate-related disclosure for central banks. Like the inaugural 2021 edition, this revised version of the Guide calls on central banks to lead by example by disclosing their climate-related risks and opportunities. Greater transparency about climate-related issues supports a sounder management of these risks, and is essential to foster the transition to a sustainable economy.

The updated Guide is organised around the four thematic areas identified by the Task Force on Climate-Related Financial Disclosures (TCFD) – Governance, Strategy, Risk Management and Metrics and Targets. It builds on and aims to complement the original TCFD recommendations¹, providing additional guidance for central banks. Headline disclosure recommendations are:

•    Governance: Disclose the institutional climate-related objectives and decision-making process of the central bank as well as climate-related governance structures for specific areas and functions.
•    Strategy: Disclose climate-related impacts related to the central bank as well as the strategy – in terms of adaptation, capacity building and communication – for handling these impacts.
•    Risk Management: Disclose the processes for managing climate-related risks at the central bank, focusing on identification, assessment, and integration. 
•    Metrics and Targets: Disclose metrics and targets relating to the central bank’s management of climate-related risks and exposure to climate-related risks and opportunities.

Disclosure recommendations of the above-mentioned categories are sorted based on their level of detail. Central banks operate under diverse circumstances, for instance regarding their mandates, disclosure obligations, balance sheet composition, and resources, which influence the level of detail of their disclosures. Therefore, the revised Guide distinguishes between foundational (“baseline”) and complementary (“building block”) disclosure recommendations, acknowledging that there is no one-size-fits-all solution.  

This second edition delivers on the commitment to leverage the experience gathered in related areas of work of the NGFS. A new chapter on metrics and targets benefits from the NGFS’ work on sustainable and responsible investment. The Guide also provides additional support on the disclosure of internal operations, building on work conducted by the NGFS subgroup on greening central banks’ corporate operations. The updated version also covers disclosure on institutional functions, i.e. monetary policy, supervision, financial stability.

Looking ahead, the NGFS will build upon the Guide to further strengthen its role as a forum for central banks to share their practical experiences, and support one another in enhancing their climate-related measures. The NGFS will help central banks navigate the landscape of evolving disclosure frameworks, such as the European Sustainability Reporting Standards and the standards of International Sustainability Standards Board. The NGFS will also explore whether the Guide could be adapted to facilitate nature-related disclosures.

Dr Sabine Mauderer, Chair of the NGFS, Member of the Executive Board of the Deutsche Bundesbank:

“Disclosing climate-related risks is key to understanding and ultimately managing them successfully. By disclosing their own climate-related risks and opportunities, central banks can encourage others to follow suit. Meaningful climate-related disclosure in turn requires rigorous measurement and clear targets. Therefore, this updated report with its additional chapter on metrics and targets is a valuable resource that benefits from the NGFS’ work on other issues, especially sustainable and responsible investment.”

Paolo Angelini, Co-chair of the NGFS Workstream on Net Zero for Central Banks, Member of the Governing Board and Deputy Governor of the Bank of Italy:

“This updated Guide on climate-related disclosure for central banks makes an effort to cover all areas of central bank operations, drawing on the direct experience of NGFS members gained so far. It offers practical support and inspiration to central banks willing to lead by example the efforts to promote a transparent reporting on sustainability risks and impacts.”

Simone Robbers, Co-chair of the NGFS Workstream on Net Zero for Central Banks, Assistant Governor and General Manager for Strategy, Governance and Sustainability at the Reserve Bank of New Zealand:

“This is a welcome addition to the resources central banks can call on in developing disclosures. One of the key strengths of this revision of the NGFS guidance is that it provides a manageable, staged entry to the topic of disclosure for those in the early stages of their efforts, while providing the scope for more challenging disclosures for those central banks who are more advanced. These are critical enablers for greater aspiration on the part of central banks, who will be increasingly challenged to demonstrate leadership with respect to transparency and prudent climate-related risk management within the financial systems they regulate." 

About the NGFS

The Network for Greening the Financial System (NGFS), launched at the Paris One Planet Summit on 12 December 2017, is a group of central banks and supervisors, which on a voluntary basis is willing to share best practices and contribute to the development of environment and climate risk management in the financial sector, and to mobilise mainstream finance to support the transition toward a sustainable economy. The NGFS brings together 138 central banks and supervisors and 21 observers. The NGFS is chaired by Sabine Mauderer, Member of the Executive Board of the Deutsche Bundesbank. The Secretariat, headed by Jean Boissinot, is provided by Banque de France.
For more details, visit the NGFS website and LinkedIn account or contact the NGFS Secretariat at Banque de France sec.ngfs@banque-france.fr
 

For more details, visit the NGFS website and LinkedIn account or contact the NGFS Secretariat at Banque de France sec.ngfs@banque-france.fr
Press Office at Banque de France : +33 (0) 1 42 92 39 00 / presse@banque-france.fr

¹The TCFD was disbanded upon fulfilling its mandate. The FSB asked the IFRS Foundation to take over the monitoring of the progress of companies’ climate-related disclosures.