Press release Paris, November 22, 2022 – Positive Money and its partners, including Reclaim Finance, have published the Green Central Banking Scorecard 2022, which ranks G20 central banks according to their environmental practices. This ranking reveals that central banks are still struggling to take action on the climate issue, and even more so to use their monetary policies as a lever for action against climate changes. Even the best-rated banks, including the Banque de France and other Eurosystem banks, are failing to support the ecological transition. NGOs call on central banks to break with this wait-and-see attitude to respond to the inflationary and climate crisis.\u00a0<\/strong><\/p>\n<\/div><\/div><\/div> This ranking, published for the first time in March 2021 and updated in October 2021, comes at a time when action by central banks in the face of galloping inflation caused by fossil fuel dependency is at the heart of the economic and financial world’s concerns. To overcome the current crisis, more and more voices are being raised to emphasize that the energy transition and the fight against climate change are essential if Central Banks are to deliver on their mission of price stability (2).<\/p>\n Yet the new edition of the ranking highlights the failure of Central Banks to make progress on the climate issue and – even more so – to support the transition. While 17 of the 20 banks evaluated reach the maximum score in the research and advocacy category (3), only one bank exceeds the average on all criteria (4).<\/p>\n Nikki Eames, Positive Money economist and lead author of the report, says: <\/b>\u00ab\u00a0By trying to curb inflation in the short term without addressing the climate crisis, Central Banks are shooting themselves in the foot. The volatility of fossil fuel prices and this year’s extreme weather events should be enough to convince them that supporting the transition to carbon neutrality is a central pillar of their missions to maintain price and financial system stability.\u00a0\u00bb<\/p>\n<\/blockquote>\n No Central Bank is making full use of its main lever: monetary policy. On the contrary, more than half of the banks have a score of almost zero on this criterion (5) and only the Brazilian central bank exceeds 25% of the points. Unlike the Chinese and Japanese Central Banks (6), the Eurosystem banks that occupy the top places in the ranking have\u00a0 not implemented any measures to support the European transition (7).<\/p>\n Paul Schreiber, Campaigner at Reclaim Finance and contributor to the report, points out: <\/b>\u00ab\u00a0On the one hand, the ECB and the Banque de France recognize that the energy transition contributes to price stability. On the other hand, they are not taking any measures to promote this transition, or even to protect it from the effects of successive rate hikes that increase costs (8). With two days to go before the Day against Fuel Poverty, which affects 12 million people in France (9), it is time for the Banque de France to assume its leadership role by asking the ECB to support European energy efficient building renovation.\u00a0\u00bb<\/p>\n<\/blockquote>\n The improvement in the scores of some Central Banks, and the score of the Eurosystem leadership is due to the adoption of tools to manage the financial risks linked to climate change and the greater integration of these tools into the supervision of financial institutions.. Despite this relative progress, strong disparities persist, with only six central banks exceeding the average (10).<\/p>\n Beyond monetary and prudential policy, some central banks are gaining a few points by taking measures that have a limited financial impact but which reflecting a desire to set an example. This is notably the case of the Banque de France, which outperforms its Eurosystem colleagues thanks to a demanding investment policy (11), and not thanks to more ambitious monetary and prudential proposals.<\/p>\n<\/div>
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