EUROSYSTEM CENTRAL BANKS' CLIMATE-RELATED FINANCIAL DISCLOSURES OF NON-MONETARY POLICY PORTFOLIOS

Abstract

This article explores the climate-related financial disclosures of Eurosystem central banks' non-monetary policy portfolios, focusing on adherence to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Through an analysis of disclosures from 20 central banks in the euro area, it investigates governance structures, reporting practices, and metrics used to assess climate risks and opportunities. Findings reveal significant variability in transparency levels, particularly regarding governance and the frequency of climate issue reporting to boards. The mandatory metrics, including Weighted Average Carbon Intensity, Total Carbon Emissions, and Carbon Footprint, were commonly disclosed, while voluntary metrics remained underutilized. The study highlights gaps in standardized reporting and emphasizes the need for enhanced disclosure practices to support effective climate risk management within central banks. Recommendations include more comprehensive reporting aligned with TCFD guidelines, improved transparency in governance disclosures, and adopting additional metrics for a clearer understanding of climate-related risks. These findings contribute to the growing literature on sustainable finance, offering insights that may guide future policy development in central banks' climate risk management practices.