Network for Greening the Financial System

Network for Greening the Financial System
Abbreviation	NGFS
Formation	December 2017
Location	Paris, France;
Chair	Ravi Menon
Head of Secretariat	Jean Boissinot
Website	https://www.ngfs.net/

The Network for Greening the Financial System (NGFS) is a network of 114 central banks and financial supervisors^[1]^[2] that aims to accelerate the scaling up of green finance and develop recommendations for central banks' role for climate change. The NGFS was created in 2017 and its secretariat is hosted by the Banque de France. Its current chair is Ravi Menon, Managing Director of the Monetary Authority of Singapore.^[3] The NGFS has been awarded best green initiative of the year 2020 by Centralbanking.com.^[4]

According to its charter,^[5] the purpose of the NGFS is "to define, promote and contribute to the development of best practices to be implemented within and outside of the Membership of the NGFS and to conduct or commission analytical work on green finance."

The NGFS was announced at the Paris “One Planet Summit” in December 2017. The network was launched by 8 founding central banks,^[6] under the leadership of Banque de France's governor François Villeroy de Galhau, the Dutch Central Bank's Frank Elderson and the Bank of England's former governor Mark Carney.^[7]

Work and activities

The NGFS organises events and research on climate change.

Recommendations for central banks and supervisory authorities

In 2021, the NGFS identified 9 policy options that could be chosen by central banks to align their monetary policy with climate objectives.^[8]

The NGFS work is currently organised around 4 workstreams (WS) and 2 task forces (TF):

WS “Supervision”, chaired by Mr Tolga Yalkin from the Office of the Superintendent of Financial Institutions
WS “Scenario Design and Analysis”, chaired by Mr Livio Stracca from the European Central Bank
WS “Monetary Policy”, chaired by Mr James Talbot from the Bank of England
WS “Net Zero for Central Banks”, co-chaired by Mr Paolo Angelini from the Bank of Italy and Ms Simone Robbers from the Reserve Bank of New Zealand

TF “Nature-Related Risks”, co-chaired by Ms Emmanuelle Assouan from the Bank of France and Ms Saskia de Vries from De Nederlandsche Bank
TF “Capacity Building and Training”, co-chaired by Ms Madelena Mohamed from the Central Bank of Malaysia and Mr Jeffery Yong from the Bank for International Settlements

Climate scenarios

In June 2020, the NGFS presented its climate scenarios as a common baseline for analysing climate risks to the economy and the financial system. Expanded and updated data were published in the two subsequent years. The scenarios are based on the three integrated assessment models REMIND-MAgPIE (Potsdam Institute for Climate Impact Research), GCAM (University of Maryland) and MESSAGEix-GLOBIOM (International Institute for Applied Systems Analysis). Their results were fed into the NiGEM model (National Institute of Economic and Social Research) to conduct further macroeconomic analyses on inflation or unemployment. In addition, climate data provided by Climate Analytics and the ETH Zurich are published.^[9] ^[10] ^[11]^[12]^[13]

The following six scenarios were examined: "Current Policies" considers only already implemented climate policies, while "NDCs" assumes that the voluntary pledges of Nationally Determined Contributions are met. "Below 2°C" assumes that a two-degree target in line with the Paris Agreement will be met, while "Net Zero 2050" assumes a 1.5-degree target will be achieved through early, globally coordinated climate policies. "Delayed Transition" assumes tighter climate policies only from 2030, while "Divergent Net Zero" envisages regionally and sectorally different climate adaptation.^[11]

Governance and membership

Today the NGFS comprises 75 members and 13 observers.^[14]

Members of the NGFS
Name	Membership	Join date
Banque de France and ACPR	Permanent member	2017
Bank of England	Permanent member	2017
De Nederlandsche Bank	Permanent member	2017
Austrian Financial Market Authority
Banco Central de Costa Rica		2019
Banca d’Italia
Banco de México	Permanent member
Banco de España		2018
Banco de la República (Central Bank of Colombia)		2019
Banco de Portugal		2018
Bank Al-Maghrib		2018
Bank Indonesia		2019
Bank Negara Malaysia (Central Bank of Malaysia)		2018
Bank of Canada
Bank of Finland		2018
Bank of Greece
Bank of Israel
Bank of Japan		2019
Bank of Korea		2019
Bank of Mauritius		2020
Bank of Slovenia
Bank of Thailand		2019
Banque Centrale de Tunisie		2019
Banque centrale du Luxembourg		2018
Bank of Estonia		2020
Bank of Latvia		2020
Bank of Lithuania		2020
Bank of Russia		2019
Bangko Sentral ng Pilipinas		2020
Central Bank of Brazil		2020
Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)	Permanent member	2017
Bank of Mauritius
Central Bank of Armenia		2020
Central Bank of Cyprus		2020
Central Bank of Hungary
Central Bank of Malta
Central Bank of Seychelles
Central Bank of West African States		2020
Comision Nacional Bancaria y de Valores		2019
Comisión para el Mercado Financiero de Chile		2019
Commission de contrôle des activités financières (Monaco)
Commission de Surveillance du Secteur Financier (Luxembourg)
Danish Financial Supervisory Authority		2020
Danmarks Nationalbank
Department of Financial Services (DFS) of the State of New York		2019
Deutsche Bundesbank	Permanent member	2017
Dubai Financial Services Authority
European Banking Authority (EBA)		2018
European Central Bank (ECB)	Permanent member	2018
European Insurance and Occupational Pensions Authority (EIOPA)
Federal Reserve Bank of the United States	Permanent member	2020
Finansinspektionen (Swedish FSA)	Permanent member	2017
Finanstilsynet (Norwegian FSA)
Guernsey Financial Services Commission		2019
Isle of Man Financial Services Authority		2020
Istituto per la Vigilanza sulle Assicurazioni (IVASS)
Hong Kong Monetary Authority	Founding member	2017
Japan FSA		2018
Malta Financial Services Authority		2020
Monetary Authority of Singapore	Permanent member	2017
Národná banka Slovenska		2019
National Bank of Belgium		2018
National Bank of Cambodia		2020
National Bank of Georgia		2020
National Bank of Romania
Norges Bank		2018
Oesterreichische Nationalbank (OeNB)		2018
People's Bank of China	Permanent member	2017
Reserve Bank of Australia		2018
Reserve Bank of New Zealand		2018
South African Reserve Bank
Superintendencia Financiera De Colombia
Sveriges Riksbank		2018
Swiss Financial Market Supervisory Authority (FINMA)
Swiss National Bank
Asian Development Bank	Observer
Bank for International Settlement	Observer	2018
Basel Committee on Banking Supervision	Observer
European Bank for Reconstruction and Development	Observer	2018
International Organization of Securities COmmission (IOSCO)	Observer	2019
European Investment Bank	Observer
IDB (Inter-American Development Bank)	Observer	2019
International Association of Insurance Supervisors	Observer
International Monetary Fund	Observer	2019
NIB (Nordic Investment bank)	Observer
Organisation for Economic Cooperation and Development (OECD)	Observer	2018
Sustainable Insurance Forum	Observer	2018
World Bank and the International Finance Corporation	Observer	2018
Reserve Bank of India	Member	2021^[15]
National Bank of Serbia	Member	2021^[16]