Green Central Banking

Green Central Banking’s Emma Thomasson asked leading climate experts, economists and nonprofits what central bankers and financial regulators should focus on in 2025. Julia Symon of Finance Watch said that central banks need to improve their economic modelling to better assess the impact of inaction on the climate and tighten capital requirements to force banks to account for climate risks and hold more capital to protect their balance sheets. Andrew Sheng of the Asia Global Institute at the The University of Hong Kong said that more central banks should follow the example of Bangladesh and set green lending targets. Bangladesh Bank has said that banks must provide 40% of their net outstanding loans to green and sustainable ventures in the private sector from 2025. The People's Bank of China is set to prolong its provision of cheap credit to commercial lenders to fund green loans until at least 2027. Meanwhile in India, the Reserve Bank of India (RBI) has categorised renewable energy as a priority sector for lending. “There’s enough recognition of the fact that the capital flowing from other countries to the developing countries is grossly insufficient and so our banks play an important role in prioritising renewable energy,” said Suranjali Tandon of India’s National Institute of Public Finance and Policy, New Delhi. Experts urge continued efforts to promote international coordination among central banks to green the financial system, even if the Trump presidency is a stalling factor. “For four years the Fed will not be a cooperative international partner, the debates are going to continue to happen at a global level even if the US is in this sort of deep freeze,” said climate financial policy consultant Jordan Haedtler. Shona Hawkes at Rainforest Action Network urged regulators to be more ambitious, highlighting that the recent Cop16 on biodiversity agreed on an expanded role of Indigenous Peoples and local communities in saving biodiversity. “There’s increasing awareness that if we want to change the status quo on what finance today means for biodiversity and climate outcomes it can’t just be financial insiders talking to financial insiders. We actually need a much broader discussion,” she said. Philippe Ramos of Positive Money Europe said central banks should do more to investigate the relative impact of fossil fuels and renewable energy on inflation. “The ECB should do very rigorous studies to identify what is the link between green investments and a lack of inflation,” he said, noting that a continued reliance on fossil fuels made economies more vulnerable to energy price shocks. Read the full story: GreenCB.co/3BLQ09p #GreenFinance #ClimatePolicy #CentralBanking #SustainableFinance #ClimateAction #RenewableInvestments

The French financial watchdog Autorité des marchés financiers (AMF) – France wants banks and insurers to improve their reporting for the European taxonomy classification to promote environmental sustainability, calling current disclosures “dense and difficult to understand”. Read the full story: GreenCB.co/3VKm8B2 #SustainableFinance #EUTaxonomy #TransparencyInFinance #GreenBanking #EnvironmentalSustainability #FinancialRegulation

A new report from the Climate Bonds Initiative analyses challenges, progress and future strategies for managing physical risks in India. Researchers advocate for a phased and proportional approach to mandatory standards to overcome capacity issues. GreenCB.co/3VNaNR3

When the team at Climate & Capital Media – Green Central Banking’s partner site – first started writing these lists of climate change related books four years ago, there were few new books to review. Now there are many and the number seems to be constantly growing. So here’s the list of recommended fiction and nonfiction books that address the issue of climate change and our efforts to address it. Juice by Tim Winton. Set in the nearly unlivable, overheated future, Juice is all about climate justice. What If We Get It Right by Ayana Elizabeth Johnson. Is there an antidote to rising climate anxiety? Author and scientist Ayana Elizabeth Johnson thinks so. In a literary landscape often saturated with environmental despair, her book emerges as a beacon of transformative optimism. The Language of Climate Politics: Fossil-Fuel Propaganda and How to Fight It by Genevieve Guenther, PhD. Want to understand how the fossil fuel industry has been bullshitting you and why it is so effective? Genevieve Guenther’s soon-to-be-released book is for you. Nuclear Is Not the Solution: The Folly of Atomic Power in the Age of Climate Change by M V Ramana. Ramana exposes the truth lost in the fantasies of Bill Gates and other nuclear renaissance proponents. He meticulously exposes the economic black hole of the nuclear infrastructure. Green Is the New Red by Will Potter. Will Potter’s Green Is the New Red raises an important question as America braces for Trump 2.0. Should you be put in jail for protesting against environmental and climate destruction? 600ppm: A Novel of Climate Change by Clarke W Owens. In 600ppm, Clarke W Owens envisions a harrowing future where the climate crisis has fully unfolded. Set in 2051, the novel depicts a United States fractured by environmental collapse. Plastic by Scott Guild. Plastic is at once dystopian and hopeful, futuristic and yet oddly real, right now, in this age of climate crisis and plastic everywhere around us. Orbital by Samantha Harvey. The Booker Prize’s first novel set in space, Orbital is a stunningly-written homage to earth. Six astronauts from five countries orbit our planet on board the international space station 16 times a day. Planet Aqua: Rethinking Our Place in the Universe by Jeremy Rifkin. In his latest environmental discourse, Jeremy Rifkin shatters conventional wisdom with Planet Aqua, a radical manifesto that reframes our understanding of the planet. Rifkin argues that we have critically misunderstood our planetary home, viewing it as a land planet when it is, in fact, fundamentally a water planet. Navigating the Polycrisis: Mapping the Futures of Capitalism and the Earth by Michael J. Albert. This book openly reviews our “age of interconnected systemic crises with no clear end in sight”, complete with “deeper challenges … from the climate and mass extinction crises to ­future pandemics” GreenCB.co/3VMssYW #ClimateChange #HolidayBooks

#GreenCentralBanking roundup: 🇬🇲 Joof: a green paradigm shift is needed at the Central Bank of The Gambia ✅ Glasgow Financial Alliance for Net Zero (GFANZ) unveils new tools to align finance with net-zero and nature goals 🇴🇲 Oman issues new sustainable finance requirements for banks And more 👇 GreenCB.co/3ZZH89I

The French financial watchdog Autorité des marchés financiers (AMF) – France wants banks and insurers to improve their reporting for the European taxonomy classification to promote environmental sustainability, calling current disclosures “dense and difficult to understand”. “The AMF therefore calls on these institutions to continue their efforts to improve transparency by clearly indicating the assumptions made, as well as any difficulties encountered, in particular the reasons for not publishing certain indicators,” it said in a new study. The EU taxonomy is a classification system for identifying economic activities that are environmentally sustainable, but some critics doubt whether the metric will actually help drive change as its scope is limited and there is a general lack of available data. Philippe Ramos, advocacy officer from campaigning group Positive Money Europe, said it was not surprising that there were teething problems with the new system: “The European taxonomy is quite complex and subject to interpretation,” he said. “It’s very difficult for banks to implement.” Read the full story: GreenCB.co/3VKm8B2 #SustainableFinance #EUTaxonomy #TransparencyInFinance #GreenBanking #EnvironmentalSustainability #FinancialRegulation

Inflation around much of the world has returned close to target, but new inflationary risks loom. Many of these risks lie on the supply side of the economy and many are related to climate change, say David Barmes, policy fellow at the Grantham Research Institute on Climate Change & the Environment, and Luiz Awazu Pereira da Silva former deputy general manager of the Bank for International Settlements – BIS and deputy governor of the Banco Central do Brasil. Exacerbated by other features of the polycrisis, such as environmental degradation and geoeconomic fragmentation, increasingly frequent, severe and persistent climate-induced supply shocks could pose major challenges for inflation-targeting central banks. Monetary policymakers will need innovative approaches to adequately calibrate their policy stance in response. Read more: GreenCB.co/4gytOP6 #ClimateChange #Inflation

G20 countries are making some progress on greening regulatory frameworks but wholesale reform of the global financial system is still needed, say Siti Kholifatul Rizkiah and Maud ABDELLI of WWF. The G20 holds a pivotal role in leading climate and broader environmental action. Its members are responsible for 85% of global GDP and 75% of global emissions, so policies and requirements set by the group will have an impact around the world. The latest edition of Sustainable Financial Regulations and Central Bank Activities (Susreg) assessment – conducted by WWF’s Greening Finance Regulation Initiative – shows how financial regulators, supervisors and central banks within the G20 are integrating climate and environment risks into their financial regulations. Read more: https://lnkd.in/esQPV_uY #SustainableFinance #G20

In an increasingly hot and volatile world, central banks will need innovative approaches to guarantee price stability such as adaptive inflation targeting, say economists David Barmes and Luiz Awazu Pereira da Silva. Read more: GreenCB.co/4gytOP6

Developing countries like India need a lot more support from richer countries to help them invest in sustainable technology and adapt to climate change, according to a deputy governor of the Reserve Bank of India (RBI). In a speech at a conference in November, Rajeshwar Rao said the UN Cop29 climate conference held in November had fallen short of the expectations of emerging markets despite a proposal to triple climate finance to US$300bn annually by 2035. “The biggest challenge faced by us and the emerging markets and developing economies is lack of adequate financing for development of sustainable technologies and requisite infrastructure to mitigate and adapt to climate change and build a robust sustainable financial system,” Rao said. Rao said India alone needs funding of around $160bn a year to meet its climate commitments made at Cop26 in 2021. Read more: GreenCB.co/3ZBbeP8 #ClimateJustice #LossAndDamage #Cop29