In Conversation with Mr Martin Galstyan (Governor, Central Bank of Armenia)

1. When and why did your institution join the NGFS?

The Central Bank of Armenia (CBA) joined the NGFS in April 2020. The main objective was to actively engage in the Network’s workstreams, exchange experiences with peer institutions, and benefit from international knowledge and good practices on climate-related financial risks and sustainable finance. The Central Bank of Armenia is firmly committed to doing its part in strengthening Armenia’s climate resilience and supporting a pathway for sustainable, long-term economic growth, and our deepening engagement with NGFS plays a key role in that process.

From the outset, the CBA participated in several NGFS workstreams, including those on Supervision, Monetary Policy, and Net Zero for Central Banks. This engagement has supported the CBA’s policy and decision-making, particularly during the initial phase of developing Armenia’s National Sustainable Finance Roadmap. The experience and knowledge gained through the NGFS helped inform the identification of the Roadmap’s key pillars: mobilizing sustainable finance and funding, enhancing markets, embedding sustainable finance, and building capacity and knowledge, together with the respective actions under each pillar.

2. Can you share with us the key elements of the Central Bank of Armenia's climate strategy and how it fits into the broader national strategy in your jurisdiction?

The CBA’s climate strategy is closely aligned with the pillars of Armenia’s National Sustainable Finance Roadmap, which translates these priorities into 13 concrete actions. These actions are also framed in the context of Armenia’s national climate commitments, including the target of reducing greenhouse gas emissions by 44% by 2050, with the potential to reach 52% subject to the availability of international financial and technical resources, as well as the country’s long-term objective of achieving carbon neutrality by 2050.

Key initiatives include the introduction of climate- and ESG-related reporting requirements for banks, with plans to further develop these requirements into a comprehensive disclosure framework over the coming years. The CBA is also supporting the development of a national green taxonomy, led by the Ministry of Economy in cooperation with the CBA and other relevant stakeholders.

In addition, the CBA has introduced a sectoral climate-risk assessment tool, Risk Radar (1), which is expected to be complemented by geographical and individual borrower-level risk assessment tools, ultimately providing a more comprehensive framework for climate-risk assessment and management. The resulting methodology and guidance will also support banks in strengthening their own climate-risk management practices.

Furthermore, the CBA has developed a climate-transition stress-testing framework in cooperation with the World Bank. The results will provide an important basis for assessing the potential implications of carbon pricing, including the possible introduction of a carbon tax, for the Armenian economy and financial sector.

3. To which extent did the Central Bank of Armenia leverage the work of the NGFS in its own domestic journey? Any concrete examples?

The CBA has benefited significantly from its engagement with the NGFS, both through participation in its working groups and through the Network’s analytical and policy publications. The exchange of experiences with other central banks and supervisors has provided valuable insights into the development of sustainable-finance policies, supervisory tools, and related regulatory frameworks, and we’re very grateful for the knowledge-sharing platform and opportunities that NGFS provides.

There are several concrete examples of the fruits of this relationship. First, the NGFS climate scenarios provided an important reference point for the development of the CBA’s climate-transition risk stress-testing framework.

Second, the NGFS work on climate-related disclosures for central banks provided useful insights into the types of information that could be considered when developing climate-related disclosure requirements for banks and other financial institutions.

Third, the NGFS's work on climate change and monetary policy is informing our analytical agenda. Our interest here is in understanding climate change as a source of macroeconomic shocks, including how physical events and transition dynamics could affect inflation, output and the channels through which monetary policy operates in a small open economy such as Armenia. This work is at an early stage, but the NGFS provides a valuable starting point for framing the questions.

The NGFS's work on nature-related financial risks is also proving timely. With Armenia hosting the UN Biodiversity Conference (CBD COP17) in Yerevan in October 2026, the CBA is contributing to national preparations on the financial dimension of the biodiversity agenda, and the Network's conceptual framework on nature-related risks provides a useful reference point for that work.

4. One last word?

The CBA greatly values its cooperation with the NGFS and considers the Network an important platform for knowledge-sharing, peer learning, and advancing climate-related financial policies.

While resource and capacity constraints have at times limited the CBA’s ability to engage fully in the Network’s most recent initiatives, particularly its working groups, we look forward to strengthening our engagement and contributing more actively to the NGFS’s work in the future. We believe that continued, deepening cooperation will provide valuable opportunities for further developing the CBA’s climate-related policies and supervisory practices, while also allowing us to share Armenia’s own experience with the wider NGFS community. It’s an important part of a broader, collective effort to promote climate resilience and support the transition toward a more environmentally sustainable economy.

One area where we would find peer exchange particularly valuable is the regulatory and supervisory side. Armenia is exposed to earthquake, hail and drought risk, and closing the protection gap will require insurance solutions that are still new to our market, including parametric and index-based products, so understanding how other supervisors approach and prudentially treat them would be directly useful to us. The same applies to the practical, technology-enabled side of implementation: how smaller supervisory authorities and smaller institutions can collect climate-related data, run risk analytics and meet disclosure expectations proportionately, without the resources available in larger jurisdictions. These are common challenges for many members, and shared practical experience often goes further than guidance alone.

(1) The Risk Radar can be accessed via https://www.cba.am/en/fsresearchandanalyticalwork/ and https://www.cba.am/file_manager/Financial%20stability/Sustainable%20Finance/ESG_Risk_Radar_eng.pdf