On January 18th, the European Banking Authority (EBA) launched a public consultation on draft Guidelines on the management of Environmental, Social, and Governance (ESG) risk. The Guidelines outline requirements for the identification, measurement, management, and monitoring of ESG risks by institutions and prudential transition plans to address the risks arising from the transition to a climate-neutral economy. Sustainable Finance Lab drafted a response to this consultation.
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Gaston Bronstering
New report: An African Perspective on IMF Special Drawing Rights Rechanneling Proposals
SFL launches a commissioned report on the use of SDRs on the African continent and the eligibility of different SDR rechanneling proposals. The report is written by two independent researchers from Zimbabwe, Tirivangani Mutazu & Adrian Chikowore. Based on several case studies, interviews with African civil society and policy makers, and a comprehensive study of the different ways in which SDRs can be rechanneled, they conclude:
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Sara Murawski
Roundtable on climate risk and supervision
Last month Sustainable Finance Lab and the New Economics Foundation organised a virtual roundtable discussion on climate risk and prudential supervision. The goal of the discussion was to identify next steps in supervising these risks in the banking sector. Representatives from multiple central banks, academics and NGOs were present at the roundtable and shared their ideas.
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Gaston Bronstering
The dangerously optimistic global climate finance agenda
The current global climate finance agenda is insufficient to limit climate change. Especially expectations regarding the role that blended finance and domestic resource mobilization can play seem wildly optimistic.
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Sara Murawski
The banks are still holding the public sector hostage
We need a publicly anchored safe payment and savings system, not depending on the commercial banks that need to provide risky credit to companies, argue professors Dirk Bezemer (Groningen University), Arnoud Boot (Amsterdam University) and Mark Sanders (Maastricht University), all members of the Sustainable Finance Lab.
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Dirk Bezemer
NGFS climate scenarios underestimate the impact of climate change
The Network for the Greening of the Financial Sector (NGFS), the ‘green club’ of central banks, has recently published the latest version of its climate scenarios. These are intended to be used in the financial sector to model the impact of climate change, as well as mitigation efforts to limit its worst effects. However, at the current state of these scenarios, there is a real danger that they give financial institutions a false sense of comfort, leading to too little climate mitigation action. At the Sustainable Finance Lab, we recently responded to the NGFS’ call for feedback on the last vintage of the scenarios. This blog summarizes our feedback and suggestions for improvements.
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