“Based on the agreed principles, we are starting to implement certain changes which will enable the central bank to better understand, assess and disclose the risks related to climate change. We will also be able to contribute to the European Green Deal with certain investments and to the transition to a climate-friendly economy,” said Gediminas Šimkus, Member of the Board of the Bank of Lithuania.
Considering the Recommendations by the Task Force on Climate-related Financial Disclosures (TCFD) set up by the Financial Stability Board of G20, the central banks of the Eurosystem have also agreed to aim at launching annual reports on non-monetary policy investment portfolios in the upcoming two years. In accordance with these Recommendations, information will be provided on investment portfolios by assessing the investments in terms of their effect on greenhouse gas emissions as well as other climate change and responsible investment-related metrics.
The central banks have agreed to start applying the principles related to climate change and responsible investment after a comprehensive preparatory work has been completed by the members of the Eurosystem, taking into account the analysis and recommendations by the Network for Greening the Financial System (NGFS).
NGFS is a network of central banks and financial supervisory authorities which aims to contribute to the management of environmental and climate risks in the financial sector as well as mobilising funding required for the transition to a sustainable economy. The members participate in the activities of the NGFS on a voluntary basis by exchanging best practices and performing analytical activities.
The Bank of Lithuania became a member of the Network for Greening the Financial System last year. Currently, the organisation is comprised of 87 members and 13 observers from all over the world.
