A list of metrics and targets that is under construction
A stringent risk assessment and management approach relies on metrics that may be used to objectively measure the change in risks and to determine whether these developments are aligned with the institution's governance, strategy, risk management policy and any targets adopted. In accordance with their holistic approach to climate-related risks, the Banque de France and the ACPR plan to develop a set of metrics to assess not just the risks to their balance sheet but also the impact of climate-related risk on their tasks.
Reflecting a climate risk management approach that is designed to get better year on year, the list of metrics to follow is itself set to evolve. In particular, it is important to recognise the current limitations inherent in climate data, including data gaps, data that are still being standardised, the involvement of external service providers, and ongoing harmonisation of the methodologies used by different indicators.
Building in the European dimension
The Banque de France is contributing actively to the Eurosystem’s work on integrating climate issues in monetary policy; metrics relating to these efforts will be published at the level of the Eurosystem and are therefore not included in this report.
Regarding euro-denominated non-monetary policy portfolios, methodological work is currently being conducted within the Eurosystem to make the climate reports published by central banks more comparable. This work is expected to result in an initial publication of climate metrics for these portfolios in 2023.
The following list of metrics therefore represents a first stage, which is set to be expanded based on internal and external work and developments in climate data. With these metrics, and the targets adopted for its own carbon emissions and activities, the Banque de France and the ACPR intend to play a full part in the climate transition, both through their own activities and in the discharge of their tasks.
Find out more…
… about the limits of climate data and ways forward: https://www.ngfs.net/sites/default/files/medias/documents/final_report_on_bridging_data_gaps.pdf
… about the stance of Eurosystem central banks on climate reporting for non-monetary policy portfolios: https://www.ecb.europa.eu/press/pr/date/2021/html/ecb.pr210204_1~a720bc4f03.en.html