Bank of Lithuania Green Strategy outlines plans for 2023-2025
Bank of Lithuania Green Strategy sets out five main directions of climate sustainability efforts in 2023-2025. Actions planed under the Green Strategy support greening and the reduction of climate change risks in all areas of the bank’s activities. The newly-established Climate Change Centre together with other departments of the central bank will work towards achieving these green goals.
“We are taking action to address climate change in all areas of responsibility of the Bank of Lithuania. We must ensure we succeed with our Plan A – the Green Strategy - as there is no planet B,” - stresses Tomas Garbaravičius, Head of the Climate Change Centre of the Bank of Lithuania.
First, under the Green Strategy, the Bank of Lithuania aims to ensure financial stability and resilience of the Lithuanian financial sector to climate-related risks. To this end, the central bank plans to perform the sensitivity analysis of bank climate risk stress test and establish regular climate-related risk monitoring in 2023.
Second, the Bank of Lithuania aims to ensure proper mandatory green disclosures by the financial sector. It is important to note that currently the financial institutions as well as their business clients face a shortage of publicly available climate-related data and methodological clarity to properly calculate comparable and informative climate -related indicators.
“Data and data transparency are of extreme importance for fighting climate change. The more and the better-quality climate-related data is available, the more rapid and better calibrated decisions can be taken to speed up our greening efforts and ensure appropriate preparedness for any climate emergencies,” claims Tomas Garbaravičius.
To ensure effective cooperation with the financial sector participants regarding climate change matters, a dedicated forum is planned to be set up. The forum will cover issues such as the lack of available appropriate data, green disclosure requirements, and other related questions.
Third, the Bank of Lithuania seeks to reduce the environmental impact of cash. The bank supports the introduction of rounding of the final sum of purchase in cash, reducing the number of 1 and 2 euro cent coins in circulation. The production, packaging, transportation, and administering of these coins are very resource-intense processes, emitting non-negligible amounts of CO2 and producing additional plastic waste. Furthermore, large number of coins that do not decompose accumulates in the environment.
Fourth, the Bank of Lithuania has been calculating its organisational carbon footprint for four years already and strives to minimise its environmental impact. The central bank has been using electricity from renewable sources since 1 July 2019. Furthermore, it plans to conduct 100% green procurements from this year onwards.
Fifth, the Bank of Lithuania takes steps to increase green investments in its financial portfolio. In March 2023 the Bank of Lithuania, together with the ECB and other national central banks of the Eurosystem, will publish its first annual climate-related discosure of its non-monetary policy portfolios, i.e. the evaluation of investments according to their greenhouse gas emissions.