Press Release – Reclaim Finance<\/strong><\/p>\n Paris, November 24th 2021 – Sustainable and responsible investment (SRI) policies used by G20 and Eurosystem central banks are either non-existent, opaque or failing to consider environmental impacts, reveals a new report by Reclaim Finance. Out of 37 central banks, only a handful have even minimal restrictions on their investments in fossil fuels and one has credible plans to align its non-monetary portfolios (1) with the Paris Agreement.<\/strong><\/p>\n<\/div><\/div><\/div> Introducing climate criteria into non-monetary portfolios presents far fewer hurdles than for cental banks\u2019 policy portfolios (2). Yet the report unveils a shocking lack of progress even amongst those more active on the climate issue.<\/p>\n Of the 14 banks nominally committed to investing responsibly \u2013 just over a quarter of G20 and Eurosystem central banks – all come from Europe. Yet of these, nine have highly opaque socially responsible investment (SRI) policies (3), including six that do not disclose any credible information whatsoever to justify their SRI claims (4). In the Eurosystem, eight banks are still to adopt any kind of SRI approach, including Greece, Lithuania and Slovakia. Apart from a lack of transparency, the report identifies four tricks used by central banks to depict themselves as responsible investors while continuing to invest in major polluters (5).<\/p>\n Only four central banks \u2013 in France, Slovenia, Germany and Switzerland (6) – have some kind of fossil fuel restriction. With the exception of France, these restrictions are especially limited and flawed, enabling banks to continue to finance fossil fuel development and\/or the coal sector.<\/p>\n While the Banque de France sets a strong example that should inspire its counterparts, notably with regard to the need to scale down fossil fuel production and oppose new projects, its policy still has flaws, notably to clearly exclude fossil fuel developers. Similarly, Bank of Finland\u2019s recent carbon neutrality pledge is a positive signal, but, as the related emission targets and fossil fuel criteria are yet to be defined, the quality of the policy remains highly uncertain.<\/p>\n Paul Schreiber, campaigner at Reclaim Finance, explains:<\/b> <\/span>\u201cFree from any mandate concerns, the greening of non-policy portfolios is the lowest hanging fruit for any central bank that wants to act on climate. However,<\/em> most G20 and Eurosystem central banks have not even begun thinking about moving in that direction, even as the private financial sector comes under enormous pressure to do just that. Only one of the 37 banks analyzed is seriously considering the climate issue in its investment policy, while a mere four have restrictions on fossil fuel investments. The most prominent feature of central banks\u2019 SRI policies remains their opacity, a field where the ECB should be awarded a special prize for its refusal to disclose meaningful information on its supposed sustainable investment policy even as it advertises its new climate roadmap.<\/em>\u201d<\/p>\n<\/blockquote>\n Reclaim Finance urges central banks to adopt strong policies that include: 1) a general commitment to align on a 1.5\u00b0C trajectory and to exit fossil fuels by 2050; 2) a fossil fuel policy that bars investment in companies that develop new fossil fuel production projects; 3) a Paris-aligned coal exit policy; 4) a policy regarding unconventional oil and gas (7). Beyond non-policy portfolios, the report calls on central banks to decarbonize their monetary policy \u2013 starting with their quantitative easing programs and collateral frameworks \u2013 and on the Network for Greening the Financial System (NGFS) to push for these recommendations.<\/p>\n Read the full report<\/a><\/b><\/u><\/p>\n<\/div><\/div><\/div><\/div><\/div>\n