Central banks are increasingly focusing on climate risks and sustainability issues; these risks may threaten the stability of the financial system. There could also be a significant macroeconomic impact that prevents central banks from fulfilling their mandate and complicates the assessment of the outlook for prices and economic activity, which is necessary for formulating monetary policy strategies. These risks may also affect the value of the financial assets held on central banks' balance sheets and therefore their capital adequacy. The analyses that central banks conduct to quantify and manage the economic risks linked to climate change and to evaluate the policies needed to address them can be made available to the public at large.
In their capacity as investors, central banks act as a benchmark for other institutions in risk analysis and management, in the adoption of investment decisions that are consistent with the decarbonization targets, and in increasing savers' awareness.
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