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TCFD Guide Helps Central Banks Manage, Report Climate Risks

NGFS ‘how-to’ guide allows central banks to take own specificities into account and decide on the scope and depth of their disclosure.

The Network for Greening the Financial System (NGFS) has published a new guide on climate-related disclosure for central banks.

The guide outlines the steps central banks could take to prepare their own climate-related disclosures, explaining how central banks can disclose in line with the TCFD recommendations.

A number of NGFS members are already working toward TCFD-aligned disclosure of all or of parts of their activities.

The guide follows a step-by-step approach, to allow central banks to take their own specificities into account and to flexibly decide on the scope and depth of their disclosure, the NGFS said.

On governance, the NGFS recommends that central banks disclose the high-level approach to climate-related risks and opportunities, as well as climate-related governance structures around monetary policy, asset management, financial stability, and internal operations.

On strategy, central banks should disclose strategies for identifying, assessing and describing climate-related risks, as well as any adaptation of areas and functions to climate-related risks and opportunities.

On risk management, central banks should disclose the current state of climate-related risk management, including integration with non-climate-related risk management.

The fourth pillar of the TCFD recommendations, metrics and targets, is approached in the guide through a cross cutting perspective – serving to inform and support central bank governance, strategy, and risk management processes.

“This ‘how-to’ guide delivers on our commitment to promote climate-related disclosure among central banks,” said Dr Sabine Mauderer, chair of the NGFS’ “Scaling-up green finance” workstream, and a member of Deutsche Bundesbank’s executive board.

“It is an open invitation to all central banks anywhere to lead by example in disclosing their climate-related risks.”

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