Central bankers are increasingly environmentally-conscious.
When it comes to tree-huggers, central bankers aren’t the first people you usually think of. But two years ago, during the One Planet Summit in Paris, three dozen central banks formed a coalition called the Network for Greening the Financial System (NGFS) to help encourage what they hope will be a “transition to a green and low-carbon economy.”
The NGFS’s mission “is to help strengthen the global response required to meet the goals of the  Paris [climate change] agreement and to enhance the role of the financial system to manage risks and to mobilize capital for green and low-carbon investments in the broader context of environmentally sustainable development.” The United Kingdom, China and France are spearheading the effort. The NGFS is headquartered in Paris. High-profile absentees include the United States and Brazil.
In April, the NGFS released its first report, a self-styled “call to action” with six main recommendations. The first four are aimed at central banks themselves; the other two are more general:
• Integrate climate-related risks into financial-stability monitoring and micro-supervision.
• Integrate sustainability factors into own-portfolio management.
• Bridge data gaps; public authorities should share data of relevance to Climate Risk Assessment (CRA) and make them public.
• Build awareness and intellectual capacity and encourage technical assistance and knowledge-sharing.
• Achieve robust and internationally consistent climate and environment-related disclosure.
• Support the development of a taxonomy of economic activities and their relationship to green development.
“If the financial community acts on these recommendations, we will be two big steps closer to ensuring an orderly transition to a low-carbon economy,” according to an open letter signed by Bank of England Governor Mark Carney, Banque de France Governor François Villeroy de Galhau, and NGFS Chair Frank Elderson. The letter states, “We recognize that the challenges we face are unprecedented, urgent and analytically difficult. The stakes are undoubtedly high, but the commitment of all actors in the financial system to act on these recommendations will help avoid a climate-driven ‘Minsky moment’—the term we use to refer to a sudden collapse in asset prices.”