Climate Change: Managing Financial Risks and Green Finance Initiatives main page 2021

Climate Change: Managing Financial Risks and Green Finance Initiatives

Climate Change: Managing Financial Risks and Green Finance Initiatives

November 29 – December 2 

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, their contribution can be separated into three parts: as market players in both domestic and foreign operations; as supervisors and the institution responsible for financial stability, and thirdly as institutions themselves, their operations and impact. Yet, questions remain around how to incorporate these shifts into existing mandates and objectives and the practical and communication challenges that in turn presents. More broadly, how they bring together these efforts at an institutional, strategic level will come into focus.

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, culminating in the Practical Implementation Workshop.

Timings: 7am-11am (EST) | 12pm-4pm (GMT) | 8pm-12am (SGT) 

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

12:0012:15

Course introduction
Course introduction session led by the chair

13:00 - 13:15

  • 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.

12:1513:15

Climate change as an emerging source of systemic risk and instability

13:15 - 14:15

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

Head of Systemic Risk and Financial Institutions Division

European Central Bank

Paul heads the Systemic Risk and Financial Institutions Division of the European Central Bank (ECB). In this role, he leads systemic risk analysis for the euro area feeding into the ECB’s flagship Financial Stability Review, as well as macroprudential policy for the largest euro area banks. In recent years, Paul has also been leading climate-related initiatives of the European Systemic Risk Board as well as Basel Committee on Banking Supervision. These roles build on over 20 years of experience within the ECB, the International Monetary Fund, the Reserve Bank of Australia and the Canadian Department of Finance in various capacities—spanning economic, financial and policy functions for a wide range of countries. He has published on a diverse set of topics, including financial cycles, climate change, global banking, macroprudential policy, housing markets, and fiscal policy. He holds an M.A. in Economics from McGill University in Montréal.

 

13:1513:30

Break

14:15 - 14:30

13:3014:30

Integrating climate change and green finance into central bank mandates

14:30 - 15:30

  • 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? 
Audun Grønn

Former special advisor to the governor

Norges Bank

Born 1953. Mr. Grønn holds a graduate degree in economics (cand.oecon. 1979) from the University of Oslo. Work experience since 1980 includes various positions at Norges Bank, including Director of International Department, Director of Statistics Department, and Special Advisor to the Governor. Mr. Grønn spent altogether eight years at IMF’s Executive Board in Washington DC, as Senior Advisor (1989-1992), Alternate Executive Director (2011-2013) and Executive Director (2013-2016), as well as one year at the ECB in Frankfurt as national central bank expert (2005-2006). He retired from his position at Norges Bank in July 2021, but continues as a consultant on a part-time basis.

14:3015:00

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

15:30 - 16:00

15:0016:00

Greening central banks’ internal operations

16:00 - 17:00

  • 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

Former Head of the sustainable finance department

Former Central Bank of Hungary

Gábor Gyura has a masters degree in Economics and also holds a PhD in Earth Sciences. He was founding head of the Sustainable Finance Department at the Central Bank of Hungary and was responsible for the Bank’s green agenda between 2018 and 2022. His main work area was the development of the domestic green finance market and the improvement of environmental risk management in the financial system, also representing the Bank in various international committees related to sustainable and climate finance such as the Network for Greening the Financial System (NGFS) and the European Supervisory Authorities. Since May 2022 Gabor is a consultant at the United Nations Environment Program Finance Initiative (UNEPFI), and since 2021 also acts as assistant professor at the Budapest University of Technology and Economics’ Finance Department, teaching and researching sustainable finance.

Incorporating Climate Risks and Sustainability in Portfolio Management and Monetary Policy

12:0013:00

Climate stress testing and modelling

15:30 - 16:30

  • 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.

13:0013:15

Break

14:00 - 14:15

13:1514:15

Implementing a sustainability mandate into a reserve management framework

15:30 - 16:30

  • 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
Mike McMorrow

Senior asset management specialist, reserve management advisory services

BIS

Mike McMorrow is a Senior Asset Management Specialist on the Reserve Management Advisory Services team in the BIS Banking Department. In this capacity, he works with reserve managers around the world on topics such as asset allocation, governance and sustainability. Prior to the BIS, he spent over 10 years at the Federal Reserve Bank of New York in a variety of capacities, including management and analyst roles in foreign reserves, mortgage markets, Treasury markets, market intelligence and quantitative analysis. He also spent a year at the Bank of England as a portfolio manager on their reserves management team. Prior to his central bank experience, he spent two years at Macroeconomic Advisers, a forecasting firm, and received degrees from the University of California, San Diego and the University of Notre Dame. 

14:1514:30

Break

15:15 - 15:30

14:3015:30

Sustainable investing: key challenges and opportunities

14:15 - 15:15

  • 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
Ricardo Gimeno

Head of the analysis and market intelligence division

Bank of Spain

Ricardo Gimeno is the Head of the Analysis and Market Intelligence Division at Banco de España. He has also worked at the ECB and the IMF, and has made research visits to Yale and American University, and teach at the NYU and several business schools in Madrid. His research has been published in the Journal of Corporate Finance, the Review of Finance, Corporate Governance, Journal of Banking and Finance, Journal of Business Ethics, or the British Journal of Management.

Ensuring the Financial System is Resilient to Climate-Related Risks

12:0013:00

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?
Andreas Breitenfellner

Lead economist, economics department

National Bank of Austria

Andreas Breitenfellner is Lead Economist at the Economics Department of the Oesterreichische Nationalbank (OeNB), which he joined in 1999. For several years, he was seconded to the European Commission (DG ECFIN) and the Austrian Delegation to the OECD in Paris. He obtained a master’s degree in social economics at the Johannes Kepler University Linz and a diploma in international relations from the Johns Hopkins University in Bologna. He analyzes and publishes on climate change related economic and financial issues, Economic and Monetary Union, inflation, energy prices and structural policies.

https://www.oenb.at/en/Monetary-Policy/Research/Researchers/andreas-breitenfellner.html

13:0013:15

Break

14:00 - 14:15

13:1514:15

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?
Christian Schmieder

Head of administration, monetary and economic department

BIS

Christian Schmieder joined the Monetary and Economic Department as Head of Administration in 2020 after working on the implementation and effects of financial regulatory reforms in the secretariats of the Financial Stability Board and the Basel Committee on Banking Supervision since 2012. Prior to that, he worked as an Economist at the International Monetary Fund, for the European Investment Bank, the Deutsche Bundesbank and in the private sector. He holds a PhD in business administration and has published a range of studies on banking and financial stability issues.

14:1514:45

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

14:15 - 14:45

14:4515:45

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?
Clara González

Senior economist, analysis and market intelligence division

Bank of Spain

Clara I. González is Senior Economist at Banco de España in the Analysis and Market Intelligence Division (Operations Department). Since 2018, she is involved in the internal work of the Banco de España regarding the challenges posed by climate change for the financial system and the development of sustainable finance. She has been a member of several international committees on this topic at the NGFS, ECB, FSC and ESRB. She works on sustainable finance topics, the implications of climate change for monetary policy and the incorporation of sustainable and responsible investment principles in portfolio management, participating in the Eurosystem’s related work in this area and in the WS3 of the NGFS focused on scaling up green finance.

Previously she worked in the Financial Stability and Macroprudential Policy Department (2015-2020) and in the International Markets Division (2012-2015) at Banco de España. Prime Minister Economic Bureau (2008-2011), Fundación de Estudios de Economía Aplicada (2007-2008), and in the Economic Analysis and Forecasting Department at Banco de España (2005-2007). She holds a PhD in Economics (Universidad Complutense de Madrid, Spain) and her dissertation was awarded with “Cum Laude” and the Prize Funcas-"Enrique Fuentes Quintana" to the best thesis in 2011-2012. She holds a Degree in Business Administration and a Master’s Degree in Actuarial and Financial Sciences (both Universidad Pontificia Comillas de Madrid, Spain). Member of the Spanish Professional Society of Actuaries. She has several publications on sustainable finance, implications of climate change for the financial system, ageing and the sustainability of the Spanish public pension system.

 

Emerging Challenges in Climate Change Standards in Central Banks’ Strategies

12:0013:00

Green taxonomies and disclosure requirements

13:00 - 14:00

  • 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.

13:0013:15

Break

14:00 - 14:15

13:1514:15

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.

14:1514:30

Break

14:15 - 14:30

14:3015:00

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

15:45 - 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
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.

15:0015:15

Feedback forum
We will send a link in this session to the feedback form and would kindly ask that you help us improve the training product by completing the survey. We would also welcome any verbal feedback in this session.

16:15 - 16:30

Date: December 16
The Implementation Workshop is a chair-led forum where attendees will have the opportunity to discuss challenges around implementing the ideas they have learnt during the Live Content. Prior to the workshop you will be emailed questions to prepare in order to gain the most from the session with peers.

13:0014:00

Implementation Workshop

11:00 - 12:00

Benefits of attending the Implementation Workshop: 

  • Developments in the area since the live content sessions, including new resource material
  • Questions arising since returning to the central bank
  • Challenges of implementation: where are the roadblocks?
  • Medium-term goals: what is realistic?
  • Establishment of group network to keep in touch with peers and share best practices

Learning outcomes

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

  •  Understand the relation of climate policy and mandate
  • Assess the impact on domestic and foreign operations
  • Gain insight into scenario analysis and stress testing as part of the toolkit to managing financial risk
  • Understand how to implement ESG into the portfolio and manage the risks
  • Understand the challenges that central banks face with data quality and variability

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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.