Bank of Lithuania to contribute to the development of green finance and climate-related risk management
Today, on the day of the UN Climate Change Conference (COP26) in Glasgow, the Network for Greening the Financial System (NGFS), the European Central Bank (ECB) and other central banks and supervisory authorities announced their commitment and plans to contribute to the development of the green financial system and the management of climate-related risks. As a member of the Eurosystem and the NGFS, the Bank of Lithuania will also actively contribute to the implementation of these initiatives.
“Close cooperation between central banks, supervisory authorities and financial market participants is critical to meeting the ambitious targets set by the UN Climate Change Conference. The Bank of Lithuania has already rolled out initiatives that contribute to the Green Deal and the transition to a climate-friendly economy. We are ready to make our contribution on an international scale as well,” says Tomas Garbaravičius, Adviser to the Deputy Chairman of the Board of the Bank of Lithuania and member of the NGFS Plenary.
As a member of the Eurosystem, the Bank of Lithuania, together with other euro area central banks, is actively contributing to the Eurosystem’s joint action to tackle climate change (see the pledge by the European Central Bank). It is envisaged to integrate climate-related risks into the financial stability monitoring and banking supervision procedures, to consider sustainability factors in investment management and to analyse the impact of climate-related risks on the Eurosystem’s monetary policy.
The Bank of Lithuania also intends to make the sustainability ambition one of the institution’s strategic objectives in order to strengthen the financial system resilience of Lithuania and the management of climate-related risks, contribute to the development of green finance in Lithuania and make the operations of the Bank of Lithuania, as an organisation, greener (see, for example, the Bank of Lithuania’s annual CO2 report).
The NGFS Network has issued the Glasgow Declaration and committed to strengthen joint efforts to increase the financial system resilience to climate-related risks and to promote green finance needed for the transition to a climate-friendly economy.
The NGFS is a network of central banks and financial supervisory authorities aimed at contributing to the management of environmental and climate risks in the financial system and helping mobilise funding to support the transition to a sustainable economy. Members participate in the network on a voluntary basis through the exchange of best practices and analytical activities.
The Bank of Lithuania became a member of the Network for Greening the Financial System last year. The organisation currently has 98 member institutions and 16 observers from around the world.