One year ago, during the COP26 climate conference in Glasgow, the Banque de France and the Autorité de contrôle prudentiel et de résolution (ACPR) pledged to publish a report before the end of 2022 detailing their climate action and in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) (COP26: Pledge by the Banque de France/ACPR). In doing so, we are following through on our determination to act transparently with regard to the public and our peers, amid rising expectations on corporate extra-financial reporting, especially within the European Union (EU).
Helping to assess, mitigate and manage the impact of climate risks on the real economy and the financial system now forms, in our view, part and parcel of the mandate entrusted to central banks and supervisors, for both monetary strategy and financial stability. The Banque de France was among the first to act in encouraging the community of central banks and supervisors to recognise climate issues. Internationally, in 2017, it was one of the founding members of the Network for Greening the Financial System (NGFS), which now counts 121 members and for which the Banque de France acts as the permanent global secretariat. In terms of internal governance, we were one of the first central banks to set up a team that is totally focused on climate issues – our Climate Change Centre – which allows us to act even more effectively by nurturing new skills and unlocking synergies between business areas and activities. The pilot exercise of climate scenario analysis conducted by the ACPR in 2020-2021 in partnership with the entities under its supervision is another illustration of our resolve to take action. We are applying our ambitions across all of our tasks and embedding them in our corporate strategy, with tangible goals set for 2024.
We have been guided in the past by the work of the TCFD, which helped to shape the Responsible Investment Report that we have published annually since 2019. Now, we want to go a step further by integrating the full spectrum of activities undertaken by the Banque de France and the ACPR, including financial stability, the operations of our branch network, and our goal of reducing the carbon footprint of our activities.
In keeping with TCFD recommendations, this report begins by presenting the governance arrangements in place to manage climate issues, as well as the strategy developed in this area by the Banque de France and the ACPR, which is fully integrated into our overall strategy. The report then explains how the Banque de France manages the climate change risks identified within the scope of its missions. It concludes by describing a series of metrics and targets to measure the change in climate-relatedrisks related to our activity and, more broadly, the development of our climate action. As per the NGFS recommendations on central bank disclosure, this report takes a broad view by considering the impact of climate change on our balance sheet but also on our missions.
This is the first report of its kind for the Banque de France. Our aim is to publish again on a regular basis, gradually fine-tuning the scope and accuracy of this exercise, in line with the learning-by-doing approach that we have embraced since taking our first steps in this area. The report will be supplemented next year by a report on our euro-denominated non-monetary policy portfolios, in line with the common stance adopted by Eurosystem central banks.
Preparing this report has played a valuable role in galvanising the efforts already underway and in instilling a shared climate culture across all our activities. Governments have just met at the COP27 conference to accelerate the transition to carbon neutrality and bolster our resilience to climate change; the past 12 months have underlined – sometimes dramatically – the urgent need to act : I am pleased to reiterate once more, with this report, our steadfast support of efforts to meet the goals of the Paris agreement and promote sustainable finance.
François Villeroy de Galhau
Updated on: 12/02/2022 09:53