Climate Change: Managing Financial Risks and Green Finance Initiatives 2022a

Climate Change: Managing Financial Risks and Green Finance Initiatives

Climate Change: Managing Financial Risks and Green Finance Initiatives

March 7 – 10

Live Content sessions held: 8am–12pm (EST) | 1pm–5pm (GMT) | 9pm–1am (SGT) 

Chair: Morten Kjærgaard, independent consultant and former head of reserve management, National Bank of Denmark

In 2022, it is no longer a question of whether central banks should address climate change, but rather how and when.

For central banks, a key question is how to implement climate change at a strategic level when it affects the whole central bank, yet in a variety of specialised and localised ways. As market players central banks buy and sell assets which have ESG ratings; as supervisors they assess and address the financial risks from climate change; and lastly as institutions they have a carbon footprint.  

Yet, questions remain around how to incorporate climate change into existing mandates, objectives, policies and strategic plans.  

This course is designed to equip central bankers to meet these challenges. Each day will feature three hours of expert-led Live Content to maximise the opportunity to share and learn. The chair will ensure participants have opportunities to network throughout the course, with time set aside for a workshop on implementing key learnings.

View chair letter.

 

Course agenda

Two weeks prior to your training course you will be emailed access to our content hub with course materials, including a trial to Central Banking if you are not already subscribed. There will be a combination of articles, reports and presentations that will contribute to two hours of preparation time for the live content. Presentations for the sessions will also be held here subject to the speaker approval.

New roles and responsibilities for central banks

13:0013:30

Course introduction
Course introduction session led by the chair

13:00 - 13:30

  • Introductions and welcome from the chairperson
  • Overview of the training course
  • Discussion of the delegate expectations
Morten Kjærgaard

Independent consultant

former National Bank of Denmark

Morten is an independent consultant within asset management and public finance. He is former Head of Reserve Management at Danmarks Nationalbank where he was responsible for the trading, risk management, quant and monetary policy collateral units. He has also worked with monetary policy implementation, government debt management and international relations and has worked as an international consultant on behalf of the World Bank.

13:3014:30

Climate change as an emerging source of systemic risk and instability

13:30 - 14:30

  • Granular mapping of key transition and physical risks
  • Forward looking assessment of implications of climate change for financial stability
  • Prudential policy considerations

14:3014:45

Break

14:30 - 14:45

14:4515:45

Integrating climate change and green finance into central bank mandates

14:45 - 15:45

  • Do climate-related risks and mitigation policies fit into central bank mandates and objectives?
  • Should central banks be mandated to play a role in greening the financial system?
  • Comparing mandates and policy tools in high-income regions vs. developing economies
  • Discussion: what are the risks of overstretching central banks’ mandates? 

15:4516:15

Networking break
An opportunity to share experiences with your fellow participants.

15:45 - 16:45

16:1517:15

Greening central banks’ internal operations

16:15 - 17:15

  • What are central banks doing to green their internal operations?
  • Key sustainability goals and targets for cutting central banks’ environmental footprints
  • Successes and challenges from central banks with advanced green initiatives
  • Discussion: which areas are participants’ own organisations focused on greening?
Gábor Gyura

Head of the sustainable finance department

Central Bank of Hungary

Gábor Gyura acts as Head of the Sustainable Finance Department at the Central Bank of Hungary. Being responsible for the Bank’s green agenda, his main work area is the development of the domestic green finance market and the improvement of environmental risk management in the financial system. He is a member of several international committees and working groups in the field of green finance. He has a masters degree in Economics and also holds a PhD in Earth Sciences. Besides his central bank role, he also works as part-time assistant professor at the Budapest University of Technology and Economics.

Incorporating climate risks and sustainability in portfolio management and monetary policy

13:0014:00

Adapting monetary policy operational frameworks to reflect climate-related risks

13:00 - 14:00

  • The challenges of assessing the consequences for monetary policy effectiveness
  • Identifying the options that a central bank could consider
  • Assessing potential climate-related adjustments to monetary policy operational frameworks  
  • Discussion: is disclosure a prerequisite for other potential adjustments?

14:0014:15

Break

14:00 - 14:15

14:1515:15

Implementing a sustainability mandate into a reserve management framework

14:15 - 15:15

  • Investing in instruments issued for sustainable purposes
  • Using ESG metrics to support investment decision-making
  • Integrating climate considerations into investment beliefs
  • Conducting risk management with a sustainability focus

15:1515:30

Break

15:15 - 15:30

15:3016:30

Sustainable investing: key challenges and opportunities

15:30 - 16:30

  • Emergence of sustainable investing as the new normal
  • Impact of ESG mandate on the investment strategies of central banks
  • Tips for balancing financial and sustainability requirements
  • Criteria for assessing the suitability of available products and services

Ensuring the financial system is resilient to climate-related risks

13:0014:00

Climate stress testing and modelling

13:00 - 14:00

  • Climate change: risks for financial stability
  • Climate change: the supervisory approach
  • Climate change stress testing: design and conceptual issues
  • Case studies: lessons and some results from climate change stress testing
Pedro Duarte Neves

Former vice-governor

Bank of Portugal

Pedro Duarte Neves was Vice-Governor of Banco de Portugal from June 2006 to September 2017. During that period, he also chaired the Board of the Deposit Guarantee Fund, the Board of the Resolution Fund and the Board of the National Council for Audit Supervision. As of September 2017 he acts as Adviser for the Board of Directors of Banco de Portugal.

Pedro Duarte Neves acted as Alternate Chairperson of the EBA from July 2013 to June 2018 and, over the past years, chaired a number of European groups on economic and financial matters in the scope of the Financial Stability Board, the European Banking Authority and the Joint Committee of the European Supervisory Authorities. Pedro Duarte Neves was a member of the ECB’s Supervisory Board until September 2014 and a member of the General Board of the European Systemic Risk Board, from its creation to September 2017.

He joined the Research Department of Banco de Portugal in 1994 and served there until July 2004. He chaired the National Communications Authority (ANACOM) from September 2004 to June 2006.

Pedro Duarte Neves holds a PhD in Economics from Université Catholique de Louvain and he is Professor at Católica Lisbon – Business and Economics.

14:0014:15

Break

13:00 - 13:15

14:1515:15

Effective disclosures: improving governance by improving transparency

14:15 - 15:15

  • Improving and increasing reporting of climate-related financial information
  • Opportunities and challenges of climate disclosures
  • Areas of the TCFD framework useful for central banks’ own disclosures
  • Discussion: should central banks mandate disclosures?

15:1515:45

Networking break
An opportunity to share experiences with your fellow participants.

15:15 - 15:45

15:4516:45

Green taxonomies and disclosure requirements

15:45 - 16:45

  • The EU green taxonomy and its applications
  • Disclosure requirements linked to the EU green taxonomy
  • Estimating the taxonomy-alignment and the exposure to transition risk in financial portfolios
  • Discussion: which taxonomies are participants using in their own organisations?
Lucia Alessi

Responsible for sustainable finance

European Commission - Joint Research Centre

Lucia Alessi is Responsible for Sustainable Finance at the Joint Research Centre of the European Commission. Her team develops research in support of EU policymaking on sustainable investments and ESG risks. Her more recent research focuses on the development of carbon stress tests and the assessment of ESG risks for banks, on the analysis of investors' attitude towards climate risk, and on the EU green Taxonomy. From 2007 to 2015 she worked at the European Central Bank, where she served in various areas, including Research, Economics, and Macroprudential Policy and Financial Stability.

Emerging challenges in climate change standards in central banks’ strategies

13:0014:00

Climate change and the data challenge

13:00 - 14:00

  • Overview of climate-related data needs, availability and gaps
  • Key environmental metrics identified by central banks
  • Discussion: what challenges does data pose for participants own organisations?

14:0014:15

Break

14:00 - 14:15

14:1515:15

Incorporating climate change and sustainability into strategic plans

14:15 - 15:15

  • Developing a clear strategic view of central banks’ appetite for climate-related risks
  • Introducing explicit strategies to support the transition to net-zero
  • Liaising and coordinating with supervisors and policymakers
  • Case study: a central bank’s strategic plan for climate change
Morgan Després

Director of strategy

Banque de France

Morgan Després has been Director of Strategy at the Banque de France since March 2021. Prior to this, he was Deputy Head of the Financial Stability Department at the Banque de France and also served as the Head of the Network for Greening the Financial System (NGFS) Secretariat between 2018 and 2021. He joined the Banque de France in 2005 and served in the Payment and Settlement Systems Department and as Deputy Head of the Macroprudential Division. Other professional experience includes a secondment as Deputy Head of the Financial Stability Unit within the French Treasury Department and technical assistance missions for the IMF. Després holds an MBA from ESSEC business school, graduated from the Institut d’Etudes Politiques de Paris, and studied at the Harvard Extension School.

15:1515:30

Break

15:15 - 15:30

15:3016:15

Closing remarks and delegate action plans
Concluding session led by the chair

15:30 - 16:15

  • Summary of the course
  • Discussion of the observed trends and case studies
  • Application of learning points in the delegates’ home organisations
  • Preparation of action points

Learning outcomes

At the conclusion of the training, participants will be able to:

  • Incorporate climate change and sustainability into strategic plans
  • Understand the interaction of climate policy and central bank mandate
  • Assess the impact on domestic and foreign treasury operations
  • Gain insight into scenario analysis and stress testing climate risks
  • Understand how central banks are locating and resourcing climate change initiatives

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Morten Kjærgaard

Independent consultant

former National Bank of Denmark

Morten is an independent consultant within asset management and public finance. He is former Head of Reserve Management at Danmarks Nationalbank where he was responsible for the trading, risk management, quant and monetary policy collateral units. He has also worked with monetary policy implementation, government debt management and international relations and has worked as an international consultant on behalf of the World Bank.