Governor’s statement: Eurosystem’s commitment to sustainable and socially responsible investment in central bank portfolios
The central banks of the Eurosystem are aware of the importance of climate risks and their potential financial consequences. On the Governing Council of the ECB we have therefore set out a common framework for socially responsible and sustainable investment in connection with central banks’ own portfolios of euro-denominated securities. Over the next two years central banks will begin monitoring these portfolios through various indicators of social responsibility and sustainability in investment. At Banka Slovenije we are already investing a certain portion of the portfolio in green bonds, and we are also avoiding investments in firms that fail to meet environmental and ethical standards.
The agreed common stance applies to non-monetary policy portfolios. The management of these portfolios is exclusively the responsibility of the individual central banks that make up the Eurosystem. The definition of the common stance reflects the gradual development of the understanding of climate risks and their potential financial consequences.
With the aim of contributing to global efforts to improve the reporting of the impact on climate change, over the next two years the central banks of the Eurosystem will begin measuring and reporting carbon footprint and other indicators of socially responsible and sustainable investment for these portfolios.
Several Eurosystem central banks are already taking a variety of approaches to the socially responsible and sustainable management of their own portfolios. The common stance will support all the Eurosystem central banks in making their contribution to the low-carbon economy, and will improve awareness and understanding of climate risks, including efforts to improve the disclosure of information related to the impact on climate change.
At Banka Slovenije we have also taken a number of actions in this direction in recent years. In addition to meeting the primary objective of asset management, namely strengthening our capital over the medium term, we also strive for socially responsible and sustainable investing. We invest a certain portion of assets in green bonds, where the issuer typically earmarks the funds to finance environmentally sustainable projects.
In addition, in the corporate bond segment we follow the exclusion list of the world’s largest pension fund, which is operated by Norges Bank Investment Management. We avoid investing in firms in the tobacco and armaments industries, or in firms whose revenues come mostly from coal mining or electricity production at thermal power stations. Neither do we invest in firms involved in corruption or in firms causing major environmental harm or breaching human rights and other fundamental ethical norms.
ECB's press release is available on teh link.