Green Central Banking

Capital controls to needed address climate crisis, economist argues in new book Ann Pettifor says global financial system should be overhauled so fiscal and monetary policy can operate in tandem to address growing climate threat.

Economist @annpettifor.bsky.social argues that to tackle the climate crisis, governments and central banks must take back control of the global financial system from market governance, challenging the current orientation towards global capital markets instead of society. greencb.co/4cVKxgq

French politicians recommend that ECB looks at green dual interest rates The French national assembly has adopted several recommendations on how the EU can green its monetary policies, including researching dual interest rates.

The French national assembly has proposed measures for the eurozone’s monetary policy to make the economy more resilient to growing climate impacts, including green dual interest rates to boost long-term project financing, as well as broader financial reforms.

Read the story >> greencb.co/407rwA8

More EU investment, regulatory reform and policies needed to reach net zero, says ECB The EU’s green transition faces multiple challenges and a multipronged policy approach is needed if the bloc is to meet its goals, an ECB paper argues.

The EU’s green transition faces multiple challenges and a multipronged policy approach is needed if the bloc is to meet its goals, a @ecb.europa.eu paper argues. The shopping list includes large-scale public investments, targeted green R&D subsidies, and regulatory reform. greencb.co/4rPE1MY

What happens to climate transition plans in the wake of the EU omnibus? The omnibus may have removed the obligation of climate transition plans, but companies and banks still need them.

The EU omnibus removed the obligation for companies to adopt a climate transition plan. But that does not mean banks no longer need transition plans, experts say.

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Roundup: 'Climate risk is financial risk,' says Nigeria central bank governor African central bankers say climate change is a financial stability imperative, while the continent’s leaders endorse a continental water security framework, and ECB staff raise concerns over ESRS sim...

#GreenCentralBanking roundup:

🇳🇬 Climate risk is financial risk, says Central Bank of Nigeria governor
🇪🇺 ECB staff flag concerns over simplified sustainability reporting standards
🇦🇺 Australia launches sustainable investment labelling consultation

And more 👇

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Gaps in adaptation taxonomies hinder climate finance in Asia: report Weak and inconsistent adaptation criteria and outcome metrics are constraining climate finance to vulnerable Asian economies, according to a new report.

Without clearer criteria and metrics in adaptation taxonomies, Asia risks widening its climate financing gap, warns a new report by the Institute for Energy Economics and Financial Analysis (IEEFA).

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Extreme heat forecasts suggest bigger economic impact in developing world Four billion people could live with extreme heat by 2050 if global warming continues and that could have bigger consequences on the economy.

Almost half the world’s population will be living with extreme heat by 2050, according to a new study.

The economic impact could be felt soon in developing countries due to rising demand for energy to power air conditioning.

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ECB fines Crédit Agricole for failing to address climate risk The ECB fined Crédit Agricole €7.6mn for not meeting a deadline regarding a material assessment of its climate risks.

🇪🇺 The @ecb.europa.eu has issued a second fine for not adequately assessing climate and environmental risks. A €7.6mn periodic penalty payment was issued to Crédit Agricole on Friday for failing to meet a materiality assessment for 75 days in 2024.

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Insurers’ climate repricing calls for new methods to close Asia’s protection gap Asia’s emerging markets are among the least insured against extreme weather risks, leading to calls for adaptation and public intervention.

Despite the protection gap closing slightly in some parts of the world, Asia’s emerging markets remain among the least insured against extreme weather risks.

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Could the ECB executive board reshuffle shift how it thinks about climate? The European Central Bank executive board is facing a reshuffle in the next few years, with most of its members being replaced. While experts don't expect

🇪🇺The @ecb.europa.eu executive board is facing a reshuffle in the next few years, @moriahcosta.bsky.social looks at how the changes might shift how the bank thinks about climate?

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Roundup: Moody's upgrades Jamaica after hurricane Melissa tests disaster plans Jamaica's preparedness protects its post-hurricane rating, while the RBI delays climate reporting requirements, and the UK consults on new disclosure rules. All this and more in our latest climate new...

#GreenCentralBanking roundup:

🇯🇲 Jamaica’s sovereign rating holds thanks to disaster preparedness
🇮🇳 India defers climate disclosure rules for banks
🇬🇧 FCA proposes phased approach for UK sustainability standards

And more 👇

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ECB’s green supervision grows teeth, but will banks avoid being bitten? Now the ECB has started issuing fines for failing to address climate risks, it's up to banks to respond to this more robust supervision, says Michael Hovarth of PwC.

After several years of issuing guidance and repeatedly calling on banks to take climate and environmental risk management seriously, the @ecb.europa.eu is moving from guidance and expectations to enforcement, says Michael Horvath.

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🇺🇸🇨🇳 @climateandcap.bsky.social’s @petermckillop.bsky.social takes a look at how Kevin Warsh’s “Contraband” climate doctrine could hand China a green finance edge.

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Economic models need to go beyond GDP to account for climate change Modelling needs to incorporate wider factors such as mortality and capital loss to better anticipate climate impacts, say researchers.

Regulators need to move beyond traditional economic models to assess and understand the devastating and compounding impacts of climate change, a study from the @exeter.ac.uk, @carbontracker.bsky.social and Aurora Trust found.

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Hong Kong adds transition label to taxonomy, but gas looms in next phase Hong Kong’s updated taxonomy has stricter energy sector emissions thresholds than Singapore and Thailand. But the inclusion of gas in the next phase needs to be closely watched, say experts.

Hong Kong has become the latest country in Asia to introduce a transition category to its taxonomy, as part of efforts to raise more capital for the decarbonisation of high-emitting sectors in the city, as well as across China and the rest of the region.

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What is the petrodollar and why is it under pressure? US designs on Venezuela and Greenland have raised questions about the future of the petrodollar system, as other countries explore other currencies and green energy becomes cheaper than oil.

US designs on Venezuela and Greenland have raised questions about the future of the petrodollar system, as other countries explore other currencies and green energy becomes cheaper than oil, writes @ingridwss.bsky.social.

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Canada's public pension fund faces beneficiaries in court over fossil fuel investments A new kind of lawsuit is holding one of the largest pension funds in the world to account for fossil fuel investments, say campaigners Cheryl Randall and Patrick DeRochie.

🇨🇦 A new kind of lawsuit is holding the Canada Pension Plan Investment Board to account for fossil fuel investments, say campaigners Cheryl Randall and Patrick DeRochie of @shiftaction.bsky.social.

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Roundup: NGFS releases new green monetary policy toolkit As evidence emerges that the European Central Bank (ECB) has substantially underestimated the cost of physical climate risks, a new report from the

#GreenCentralBanking roundup:

✅ NGFS unpacks policy options for greening monetary policy
🇪🇺 ECB finds physical climate risks significantly underestimated
📋 African nations move faster than peers in adopting ISSB standards

And more 👇

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China’s ISSB-aligned reporting rules ‘go beyond many global standards’, say experts Experts say China’s new disclosure rules, which use double materiality, will simplify their compliance with the EU’s sustainability regulations.

China has finalised its first national climate disclosure standard, which now ties corporate reporting to national targets.

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Global instability set to accelerate energy transition and mineral competition Geopolitical clashes over Greenland and Venezuela mean energy security becomes a bigger driver for renewables than economics or climate.

Geopolitical tensions around crises such as Greenland and Venezuela should bolster the case for the transition away from fossil fuels, even as the shift creates new rivalries around critical minerals needed for renewable energy technologies, experts say.

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Report: most US public pensions fail to invest in climate solutions Trump climate hostility is no excuse for pensions to evade duty to protect retirement savings from risks, says environmental group.

🇺🇸 Most major US public pensions are failing to make investments that help reduce emissions and protect their members’ retirement savings from rising climate risks, according to a report by the @sierraclub.org.

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East and Southeast Asia Green Central Banking contracted support Shifting power from big banks to people. We collaborate with policymakers, the public and economists around the world so we can redesign our economic system for a better world and a healthy planet.

Our partners at @positivemoneyuk.bsky.social are looking for consultants to support the next Asia edition of the Green Central Banking Scorecard.

Details & how to apply:
positivemoney.org/vacancy/east...

Central banks should create a new carbon reward asset to speed transition Carbon reward could mobilise $3tn a year for renewables shift, according to its creator Delton Chen.

Central banks should create a new carbon reward asset to help fund the net zero transition, according to a new proposal from Global Carbon Reward (GCR).

Emma Thomasson spoke to Delton Chen, GCR executive director and founder, to find out more.

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Can local currency financing help solve the climate and debt crisis? Join us for a discussion on the challenges and opportunities of expanding local currency financing to tackle the climate and debt crisis

Our partners at @positivemoneyuk.bsky.social are hosting a webinar on whether local currency financing can help tackle the climate and debt crisis.

🗓 22 Jan | 5:30–6:45pm GMT

Register 👇

www.eventbrite.co.uk/e/can-local-...

Global warming is accelerating as air pollution ‘sunshade’ recedes, says report Actuaries and scientists predict warming to reach 2°C before 2050 as air quility improves, increasing risk of tipping points.

The pace of global warming has been underestimated due to a loss of the hidden sunshade effect created by air pollution, warns a new report from the UK’s Institute and Faculty of Actuaries and @exeter.ac.uk.

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The evolving view of climate-related financial risks in the US financial sector Tension is growing in the US financial system between increasing climate impacts and declining focus on addressing those impacts, says former Fed governor Kevin Stiroh.

Even as climate change drives increasing physical and transition risks for the financial sector and economy, the sector has pulled back on addressing climate-related financial risks, says Kevin Stiroh.

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China shows monetary independence may hinder net zero progress Government direction has spurred PBoC to adopt green monetary policy measures, argue economists Mathias Larsen and James Jackson.

Central banks around the world now acknowledge climate risk, but only one major central bank has translated this concern into systematic, large-scale monetary intervention in support of decarbonisation: the People’s Bank of China.

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Weak consensus on ‘transition’ activities in Asian taxonomies expose investors to risks Indonesia, Malaysia, Japan and China are 'effectively tolerating transition-washing' in power generation, based on a study by Energy Shift Institute.

Countries in Asia have introduced transition criteria in their taxonomies, but divergence in approaches risks impeding cross-border financing towards the decarbonisation of high-emitting sectors, according to Energy Shift Institute.

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Roundup: Bank of England strengthens its climate risk expectations Bank of England tightens climate expectations, EU launches carbon border tax, Hong Kong considers nature taxonomy, and BIS flags risk of water scarcity.

#GreenCentralBanking roundup:

🇬🇧 BoE strengthens climate risk expectations for financial firms
🇪🇺 EU competition chief defends green regulation against ‘race to the bottom’
🚰 Warnings that water scarcity poses macroeconomic risks

And more 👇

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As we look back on 2025, we’ve selected six charts that show what happened in the world of climate finance.

Here’s one of the six charts - click through to read the article for the other 5.

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