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Central bank mandates, sustainability objectives and the promotion of green finance

Dikau, Simon and Volz, Ulrich (2021) Central bank mandates, sustainability objectives and the promotion of green finance. Ecological Economics, 184. ISSN 0921-8009

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Identification Number: 10.1016/j.ecolecon.2021.107022

Abstract

This article examines how addressing climate-related risks and supporting mitigation and adaptation policies fit into central bank mandates. We conduct an analysis of mandates and objectives using the IMF's Central Bank Legislation Database and compare these to sustainability-related policies central banks have adopted in practice. Out of 135 central banks, only 12% have explicit sustainability mandates, while 40% are mandated to support the government's policy priorities, which mostly include sustainability goals. However, given that climate risks can directly affect central banks' traditional core responsibilities, all institutions ought to incorporate climate-related physical and transition risks into their policy frameworks to safeguard macro-financial stability.

Item Type: Article
Official URL: https://www.sciencedirect.com/journal/ecological-e...
Additional Information: © 2021 Elsevier B.V.
Divisions: Grantham Research Institute
Subjects: H Social Sciences > HG Finance
Date Deposited: 24 Mar 2021 13:57
Last Modified: 20 Sep 2021 02:20
URI: http://eprints.lse.ac.uk/id/eprint/109302

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