On April 10th 2020, 6 European NGOs sent a letter to the Network For Greening the Financial System (NGFS) to ask it to call central banks to integrate climate related criteria in the stimulus plans. In particular, the letter called to exclude fossil fuels.
The current set of measures taken by different members of the NGFS support high carbon emitters and significantly delay climate action. As the main coordinator of central banks’ work on “greening” the financial system, the NGFS has a special responsibility to address this problem, both in its internal work and in public.
In its last progress report, NGFS’ chairman, Franck Elderson, wrote that even in this time of crisis NGFS members “should not lose sight of the fact that climate change stays an urgent and vital issue” and that “The greener the recovery from the current crisis is, the better.” Reclaim Finance, Friends of the Earth France, Positive Money EU, The Sunrise Project, the Veblen Institute and the Sustainable Finance Lab strongly support these statements.
In this context, we ask the NGFS to publicly call for the immediate integration of climate related criteria, including fossil fuel exclusions, in the stimulus plans and to push individual central banks to commit to this agenda.
If the NGFS cannot set mandatory rules to its members, it is its mandate to promote good practices and push them to go further. As a “non-binding” entity, the NGFS as a duty to go beyond what all of its member decide to apply on their own operations and to work on tools and measures that allows for a swift and pragmatic greening of the financial system. The NGFS should push for concrete measure, that could be implemented shortly to mitigate and adapt to climate change. A good start would be to exclude assets from the most polluting companies from central banks’ list of collateral and asset purchase programs. Coal, unconventional oil and gas and the development of new fossil fuel projects should be the first assets to go.