Climate change and environmental degradation, along with the policies adopted to address them, can have an effect on economic activity and the stability of the financial system (through so-called physical and transition risks). Similarly, social conditions and corporate management factors create opportunities, but may also generate potential risks, for the economic system.
Central banks can make an important contribution to the transition, helping the financial system become more resilient to the risks stemming from environmental, social and governance (ESG) factors, and smoothing, within the scope of their mandate, the transition to a more sustainable economy.
Banca d'Italia has long been engaged at national and international level in assessing the implications of these risks for the economic and the financial system and in taking the sustainable development goals into account in discharging its institutional functions. It does so in its various roles as supervisor of financial intermediaries, research centre, monetary authority, and promoter of a culture of financial education and sustainability among the general public and firms. Over the last several years, Banca d'Italia has also unrolled a programme to integrate ESG profiles in corporate governance and to reduce its environmental footprint, with the long-term goal of net-zero carbon emissions.
Banca d'Italia regularly reports on its efforts through its publications and in interviews by its top management, always in open dialogue with its stakeholders.
