Bank of Greece COP 26 pledge

03/11/2021 - Press Releases

In the context of the 2021 United Nations Climate Change Conference (COP 26), the Bank of Greece makes this pledge to contribute, within its field of responsibility, to the Objective in Αrticle 2.1(c) of the Paris Agreement,[1]Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. This pledge supports the Glasgow Declaration of the Network for Greening the Financial System and the European Central Bank pledge on climate change action that were published earlier today, aiming to accelerate the efforts of central banks and supervisors towards greening the financial system and managing climate-related risks.

The Bank of Greece and climate change

The Bank of Greece is one of the first central banks to respond to the issue of climate change. The journey started in 2009, when the Bank of Greece established the interdisciplinary Climate Change Impacts Study Committee (CCISC), bringing together distinguished experts from various domains of knowledge.[2] The CCISC has been engaged in the study of the economic, social and environmental impacts of climate change, implementing research projects in a wide range of areas, including the economics of climate change, and disseminating research results.

Over the past twelve years, the Bank of Greece has taken several milestone actions related to climate change and environmental issues, including:

• Publication of flagship research and analysis, such as The Environmental, Economic and Social Impacts of Climate Change in Greece[3] (2011), Greek Tourism and Climate Change: Adaptation Policies and a New Growth Strategy[4] (2014), The Economics of Climate Change[5] (2018).
• Signing of a memorandum of understanding (MoU) with the Ministry of Energy and Environment and the Academy of Athens, to provide advice and contribute to the design and implementation of adaptation policies, including the drafting of the National Climate Change Adaptation Strategy (2015) and participation in the Life IP - AdaptInGr programme (2019-2026).
• Endorsement of the UNEP FI Principles for Responsible Banking (2019) - the first central bank to do so.
• Membership of the NGFS (since 2019).
• Establishment of the Climate Change and Sustainability Centre to coordinate the climate and sustainability actions of the Bank (2021).
• Contribution to raising awareness and improving climate literacy through various initiatives. Notably, the Museum of the Bank of Greece will soon launch the exhibition "Economy and Climate: Handle with care", which describes the phenomenon of climate change, its economic impact, its relevance for central banks, as well as ways to address it.

The Bank of Greece commitments

The Bank of Greece welcomes the ECB Governing Council's action plan[6] to include climate change considerations in its policy framework, as well as the NGFS willingness to expand and strengthen the collective efforts towards greening the financial system.

In the years ahead, the Bank of Greece commits to:

1. develop and maintain an action plan for addressing climate change and sustainability issues within its field of responsibility;
2. continue to engage with financial authorities, institutions and stakeholders on sustainability issues, to raise awareness and promote a better understanding of the impact of climate change on the financial system, facilitate transition to a carbon-neutral economy and enhance coordination and consistency of international policies;
3. make use of the NGFS recommendations, best practices, guides and training material in implementing the action plan and develop the necessary internal competences, skills and knowledge of climate and environmental risks;
4. conduct theoretical and empirical research and provide statistical data on climate and environmental issues, in collaboration with the various stakeholders;
5. assess the financial system's exposure to climate-related and environmental risks, including identification of the channels of their transmission to the financial system and risk impact analysis under different scenarios;
6. explore ways to embed the outcome of research and analysis and the available tools and methodologies in macroeconomic forecasting models, financial stability monitoring and supervisory approaches;
7. apply sustainable and responsible investment principles in its non-monetary policy portfolios and, consistent with the common stance of the Eurosystem,[7] start making annual climate-related disclosures on its non-monetary policy portfolios within the next two years;
8. design and implement an organisation-wide programme for reducing the environmental impact of own operations, by implementing environmental management systems and applying circular economy principles in resource management.