Climate Change and Green Finance

From June 20 to June 24, the Oesterreichische Nationalbank and the Austrian ministry of finance hosted a course on the long-term financial effects of climate change, how to identify and measure climate-related financial risks and on policy options for climate change mitigation and adaption. The course was delivered in person in Vienna, which was a highly welcome return to normal for the presenters and the participants after a pandemic-induced virtual delivery for more than two years. The JVI underwent all necessary and reasonable precautionary measures to minimize the infection risk for all involved in the course. The high attention of the participants during the presentations, the lively discussions following them and the opportunity for networking during coffee and lunch breaks clearly demonstrated the advantages of in-person courses. 

In the course, researchers presented evidence for anthropogenic climate change, summarized scientific debates about its economic consequences and described methods to measure its effects on financial markets. A series of presentations by participants, mostly from central banks and ministries of finance, provided an overview on the recent policy initiatives in countries like Armenia, the Czech Republic, Georgia, Serbia, Turkey, or Uzbekistan. It also showed that several countries had already started ambitious measures with respect to assessing and managing climate-related financial risks.  

Representatives from the European Commission and the Austrian government described the EU’s policy proposals in reaction to climate change and its consequences for financial markets like the EU taxonomy or a European green bond standard, some of which have been under consideration in the home countries of participants. A presentation by colleagues from the OeNB on the climate stress test of the Austrian banking sector was of particular interest for those in the audience who were tasked with similar exercises in their countries. 

One day was devoted to the impact of climate change on monetary policy and its implementation as well as the possible contributions of monetary policy in the fight against climate change within different monetary policy mandates. Since limitations in the availability of adequate data are one of the main obstacles in assessing the exposure of financial institutions to climate-related risks, a data providing firm presented the scope of its services ranging from firm-level emissions data to sovereign climate ratings. The course ended with a panel discussion of policy makers and climate economists on possible future measures.

Since the topic has gained in importance over the last years and the interest in the course was very strong, it is envisaged to offer a similar course in 2023.

Wolfgang Pointner, Oesterreichische Nationalbank