International climate-related initiatives
Central Banks and Supervisors Network for Greening the Financial System (NGFS)
The Bank of England is a founding member of the Central Banks and Supervisors Network for Greening the Financial System. The Network was formed in December 2017, at the One Planet Summit in Paris. It was co-founded by eight central banks and supervisors, and, as of June 2019, has over 40 members and observers.
The Bank chairs the NGFS workstream looking at sizing the risks from climate change to the financial system and macroeconomy. It actively contributes to the other workstreams on supervision of climate-related risks and scaling up green finance. In January 2019, the Bank hosted an NGFS conference on ‘the macroeconomic and financial stability impacts from climate change.’
In April 2019, the NGFS published its first comprehensive report, ‘A call for action – climate change as a source of financial risk’. This followed publication of its ‘First Progress Report’ in October 2018. The report sets out six recommendations for central banks, supervisors, policymakers and financial institutions to enhance their role in the greening of the financial system and the managing of climate and environment-related risks. Alongside the report, Mark Carney, Governor of the Bank of England, Francois Villeroy de Galhau, Governor of the Banque de France, and Frank Elderson, Chair of the Network for Greening the Financial System (NGFS) wrote an open letter on climate-related financial risks.
Sustainable Insurance Forum
The Bank also co-founded the Sustainable Insurance Forum (SIF). SIF is a global network of insurance supervisors and regulators, who are working together on sustainability challenges facing the insurance sector, including climate change.
Supporting enhanced disclosure
To allow markets to better assess, price and manage climate-related financial risks, the Financial Stability Board (FSB), at the request of G20 leaders, established the industry-led Task Force on Climate-related Financial Disclosures (TCFD). The Bank supports the TCFD, and has, for example, co-hosted a conference on scenario analysis in November 2017.
The Bank has also committed to disclose an assessment of how it manages climate-related financial risks in its annual reporting, starting in 2019/20, as announced in the press release 'Bank of England to disclose assessment of how it manages climate-related financial risk in the 2019/20 annual report’. This disclosure will mirror the framework of the TCFD, setting out how the Bank integrates climate-related financial risks across its balance sheet and processes.