Call to Action to Ensure
Transition to a Net Zero andNature Positive Economy
We, leading international Non-Governmental Organisations (NGOs), think tanks,
coalitions and researchers, have come together to call on central banks and financial
supervisors around the world to act now as precautionary agents and utilize every
available avenue to tackle the twin environmental crisis of climate change and nature loss.
Monetary policy and financial regulation
instruments need to mitigate thesignificant financial and price instability
that is caused by biodiversity loss andglobal warming. Both environmental
crisis will continue to increase if noaction is taken now. The next few years

are crucial. There is no alternative but
to do whatever it takes to mitigate thesystemic risks posed by biodiversity
and ecosystem loss. The G20 meetings
and the Conferences of the Parties to
the Convention on Biological Diversity(COP15) and on Climate (COP27) thisyear, offer great opportunities for central
bankers and financial supervisors toannounce their commitment and takedecisive action this year. WWF will
annually monitor the progress of central
banks and financial supervisors via its
SUSREG Tracker.

WHAT STEPS MUST AND CAN BE TAKEN NOW

1.5 °C

Central banks and financial regulators globally must adopt new nominal anchors for their mandates – 1.5ºC andfull biodiversity recovery by 2050 as well as -50% GHG emissions (baseline 2019) and nature positive by 2030.
Central banks, financial regulators and supervisors must lead by example and provide necessary clarity andforward guidance to financial markets actors by publishing their own clear and detailed transition plan (withclear quantifiable climate and biodiversity goals for 2025, 2030, and 2050 covering all central banking,financial regulation, and supervision activities). They must request all regulated financial institutions topublish yearly, detailed transition plans regarding all their investment, lending and underwriting practices.
Central bank and financial regulation time horizons must be extended to 10-30 years to ensure that shortterm financial flows that may have major long-term consequences for losses and instability are treated as
far higher risk.
Financial institutions investing, underwriting or lending to sectors, companies or economic activities thatare considered as ‘always environmentally harmful’ (see list at the end of the document) must face:• Higher regulatory capital requirements• Tighter liquidity requirements• Capital add-ons for concentration risk if they fail to reduce their exposure urgently• Higher systemic risk buffers according to their exposure to environmentally harmful assets and assets
in particularly vulnerable regions•C entral banks and financial supervisors should jointly co-develop their own 'always environmentally
harmful list' with scientific institutions and apply it to the monetary policy and financial regulation
instruments to provide sufficient and significant credibility to financial institutions in their actions.
Central banks must stop investing in (e.g. through asset purchase programmes), and adapt theircollateral frameworks for economic activities, companies and sub-sectors that are considered 'always
environmentally harmful' and introduce a "green dual rate" - a discount interest rate on future refinancing
encouraging clean energy production and energy efficiency renovations.
Central banks, financial regulators and supervisors must act as forceful stewards, and request governments
to take more decisive action to tackle the twin environmental crisis (e.g. fiscal policies that support fairtransition).

WWF CALL TO ACTION 2022

1

THE PROBLEM AND WHY CURRENT
POLICIES ARE NOT ENOUGHThe Dasgupta Review points out thatessentially all economic activities
depend on nature. But nature is being
lost at unprecedented rates, and withthis loss, come serious economic
impacts for society and business.
Current rates of nature loss could cost
the global economy $2.7 trillion annuallyby 2030. The world is also still on trackfor 2 to 3 degrees °C warming, rather
than the maximum 1.5 °C of warming
targeted in the Paris Agreement. Despitea range of welcome pledges and action,
including at COP26, to tackle theintertwined crisis of pollution, natureloss and climate change, biodiversity
decline continues at alarming rates andemissions of greenhouse gases (GHGs)
continue to rise.
As an example, current agriculture
practices are responsible for one thirdof current carbon emissions and 70%
of loss of terrestrial biodiversity. At
the same time, around $700 to 800B
of environmentally harmful subsidies
is heading in the wrong direction
every year, financing the annihilationof wildlife and global heating
through support for environmentallyunsustainable practices including
livestock management, overuse ofpesticides, and soil deteriorating
monocropping.

Urgent action is required to halt
nature loss by 2030 and fully restore
ecosystems by 2050. The world also
needs to ensure GHG emissions reachnet zero by 2050, peaking in 2025 andfalling by about half by 2030, in order
to limit warming to 1.5 degrees °C andavoid the worst impacts on people andecosystems.
At the moment, banks, asset managers,
insurers and others within the financial
system are still investing in, lending to,insuring and supporting industries andsectors that cause huge economic losses
and instability without penalty. There isno clear signal from financial and pricestability stewards that this activity musturgently be phased down towards zero.

BIODIVERSITY LOSS
AND CLIMATE CHANGE
ARE INHERENTLY
LINKED TO THE
CORE MANDATESOF CENTRAL BANKSAND FINANCIAL
SUPERVISORSWWF CALL TO ACTION 2022

2

CENTRAL BANKSAND FINANCIAL
SUPERVISORS SHOULD
USE A PRECAUTIONARYAPPROACH, AND WORKPROACTIVELY AND
DECISIVELY TO PREVENT
FUTURE RISKS, AS THIS IS
WITHIN THE REMITS OF
THEIR MANDATES,
FOCUSING ON THE MOSTENVIRONMENTALLYHARMFUL BUSINESSES &SECTORS.

There are other precedents!
Central banks took center stage when
it came to saving our financial systemand economy during the Financial
Crisis 2007-2009. Since then,they have repeatedly acted undersituations characterized by highuncertainty, moving swiftly, withincomplete information, using all
available tools and instruments, andadvocated for large interventions,rather than for small ones.
Given the magnitude of theclimate, pollution and biodiversity
risks that we face – many ofwhich are already being realized
in the form of increased floods,
droughts, heatwaves, and fires - itmakes sense to apply a similar
approach. Central bankers andfinancial supervisors need tounderstand that we are alreadyin the midst of an environmental
poly-crisis that requires swift,
large-scale and coordinated action.
Conversely, failing to pursue
active intervention in the face ofenvironmental crisis is itself apolicy choice that carries risks.

ACTION IS WITHIN THE EXISTINGMANDATES OF CENTRAL BANKS AND
FINANCIAL SUPERVISORS
There is overwhelming evidence accepted
by governments globally that air, water, soil
pollution and biodiversity loss will cause
increasing financial losses and financial andeconomic instability.
These multiple environmental crises also havea huge negative impact on global supply chainsand production, leading to major increases in
inflation. Given that central banks and financial
supervisors exist to provide financial and pricestability, pre-emptive action to mitigate theserisks is firmly within their mandate.
Though central banks and financial
supervisors have recognised in recent years
that they do have the mandate to take action
on climate related financial risk, they are
yet to make full use of their market shaping
role to limit the negative environmental
impacts generated by regulated actors, suchas banks, insurance companies and asset
managers. They have also so far failed toafford biodiversity and ecosystem loss thesame significance as climate change, despite
evidence that the two crises compound one
another and require equally urgent action.

A PATHWAY TO A CLIMATE SAFE AND NATURE POSITIVE GLOBAL ECONOMY
GREENHOUSEGASES

CENTRAL BANKS AND
FINANCIAL SUPERVISORSSHOULD ACT NOW AND
USE EVERY AVAILABLEAVENUE TO REDUCE
GREENHOUSE GASEMISSIONS AND RECOVER
BIODIVERSITY – AND STOPDISTINGUISHING BETWEENRISKS AND IMPACTS, AS
TODAYS IMPACTS ARETOMORROW’S RISKS.

BIODIVERSITY
PHASE 0Plan, set,
and publicly
declareexpectations
to send thenecessary
signals tofinancialmarkets.

(2022-2025)(2025-2030)(2030-2050)

PHASE 1PHASE 2

PHASE 3–15% GHG emissions–50% GHG emissions

Net zero CO2 emissions

Stabilise biodiversity
and zero net loss

More biodiversity than in2020 (nature positive)

Full recovery and restorationof biodiversity* The GHG and Biodiversity related curves are linear for illustration purposes. These need to align with sciencebased scenarios such as 1,5C aligned with no/low overshoot by 2050.
** The time intervals depicted here are focused on near term priorities. Nevertheless it is essential for financial
actors to do regular contiuous target setting in 5-yearly (ideally shorter) time intervals, and annual progress
reporting against these targets.

WWF CALL TO ACTION 2022

3

WHY DISCLOSURE IS NECESSARY
BUT NOT SUFFICIENT
The steady increase in climate related
financial disclosures in recent years has
been a positive development, but whilst
disclosure is a crucial first step, it is
not sufficient to achieve change at thescale and speed required. The quality of
disclosures can be poor and lack substance,and many financial institutions have yet todisclose: the European Central Bank foundthat only 15% of European banks publish
data on the emissions they finance, despite
the recommendations of the Task Forceon Climate Related Financial Disclosures
being in place since 2017. Nature-related
financial disclosures are still a way off,with a framework yet to be agreed.
Practice shows that central banks andfinancial supervisors recognize thatthey must move beyond disclosure
regimes, with the Bank for International
Settlements calling less for improvements
in risk modelling and more for decisive,
immediate action and coordination.
Furthermore, the time horizons ofinvestors and financial institutions arealso often far shorter than the timescalein which damage to the planet will causesignificant financial losses and instability.

CENTRAL BANKS, FINANCIAL REGULATORS AND
SUPERVISORS NEED TO LEAD BY EXAMPLE AND PROVIDENECESSARY CLARITY AND GUIDANCE TO FINANCIAL
ACTORS BY PUBLISHING THEIR OWN DETAILED
TRANSITION PLANS, WITH CLEAR QUANTIFIABLE
CLIMATE AND BIODIVERSITY GOALS.

Chumbe Island Coral Park, Zanzibar, Tanzania © Martin Harvey / WWFJUST TRANSITION AND GEOPOLITICS
Governments, central banks and financial supervisors must work together to ensure that all of the above is delivered in a waythat is consistent with a just transition. Thereby the urgent and necessary transition away from harmful activities does notdisadvantage those on the lowest incomes. This would include taking into account issues relating to the current challenges
posed by rising inflation and the cost of living, and the consequences for energy of Russia’s invasion in Ukraine.

REFERENCES
1. S
 ustainable Financial Regulations and Central Bank
Activities (SUSREG) https://www.susreg.org/
2. P
 artha Dasgupta. (2021). The Economics of Biodiversity:
The Dasgupta Review.
3. https://www.weforum.org/agenda/2021/07/climatechange-economic-cost-world-bank-environment/
4. IPCC (2022). Climate Change 2022 – Mitigation of
Climate Change
5. https://www.ecb.europa.eu/pub/financial-stability/
fsr/special/html/ecb.fsrart201905_1~47cf778cc1.
en.html#:~:text=As%20climate%20change%20
advances%2C%20the,large%20number%20of%20
financial%20institutions; https://www.lse.ac.uk/
WWF CALL TO ACTION 2022

granthaminstitute/news/nature-loss-threatensfinancial-stability-and-central-banks-should-act-newreport/#:~:text=LONDON%3A%20Biodiversity%20
loss%20poses%20a,bankers%2C%20financial%20
supervisors%20and%20academic
6. h ttps://www.theatlantic.com/science/archive/2022/02/
greenflation-prices-inflation-climate-change-coffeelumber/621456/; https://www.ngfs.net/sites/default/
files/medias/documents/biodiversity_and_financial_stablity_building_the_case_for_action.pdf
7. https://www.bloomberg.com/news/articles/2022-03-14/
ecb-says-banks-still-need-to-make-progress-on-climatedisclosure#
8. https://www.bis.org/publ/othp31.pdf
4ALWAYS ENVIRONMENTALLY HARMFUL REFERENCE POINTSThis chart sets out the reference points for economic activities, businesses, and sectors that central banks and financial
supervisors should consider as ‘Always Environmentally Harmful’, which can serve as a ‘dirty taxonomy’ for adapting monetary
policy and financial regulation instruments. Central banks and financial supervisors need to choose their reference point(economic activitiy-, company-, or sub-sector-level) for adapting all their financial regulation and monetary policy instruments.

ALWAYS ENVIRONMENTALLY HARMFUL ECONOMIC ACTIVITIES

Always significantly harmful economic
activities based on the ‘extended taxonomy’of the EU Platform on Sustainable Finance,
and activities related to logging of primaryor old growth forests, deep-sea bottom
trawling, and exploiting and trading ofendangered IUCN RED List species.

Harmful economic activities that
could be retrofitted to exit the harmful
category, based on the ‘extended
taxonomy’ of the EU Platform (e.g.
truck, airplane and car manufacturers,
steel and cement production, andbuilding construction).

ALWAYS ENVIRONMENTALLY HARMFULCOMPANIES (BROAD)

Companies thatare expanding
coal production.

*See for example
Urgewald’s Global
Coal Exit List.

Companies thatare expanding
the oil and gas
production.

*See for example
Urgewald’s Global
Oil and Gas
Exit List.

Constituent
companies of
the Carbon
Underground 200
that identifies the
top 100 coal andtop 100 oil andgas publicly tradedreserve holders
globally.

Damaging activities that take placein certain geographical areas of highenvironmental importance. For example
No-Go-Areas such as natural World
Heritage Sites, Protected Areas asindicated in the Convention on Biological
Diversity or Key Biodiversity Areas).

ALWAYS ENVIRONMENTALLY HARMFULCOMPANIES (SPECIFIC)

Companies thatare expanding theirenvironmentally
harmful
activities shouldsystematically beconsidered as highenvironmental
risk, independentof their exposure
to harmful
activities and theirenvironmental
targets andtransitions plans.

Thresholds forconsidering acompany harmful,
to identify thosecompanies that are
most exposed hence
face the highest
related financial risks(e.g. 30% of revenues
from harmful activities
until 2025, thermal
coal max. 15% ofrevenue by 2025, ordeforestation related
activities need to bephased out by 2030).

Exception: Harmfulcompanies that canbe exempted, basedon their actions to
reduce their exposure
to harmful activities.
The companies haveset and publishedmeasurable, specific,
time-bound, sciencebased target(s) forthe environmental
issues, publish fiveyear transition plans,
and report annual
progress.

HARMFUL ECONOMIC SUB SECTORS• Oil & Gas Drilling (GICS Code: 10101010)• Integrated Oil & Gas (GICS Code: 10102010)• Oil & Gas Exploration & Production (GICS Code: 10102020)• Oil & Gas Refining & Marketing (GICS Code: 10102030)• Oil & Gas Storage & Transportation (GICS Code: 10102040)• Coal & Consumable Fuels (GICS Code: 10102050)• Fertilizers & Agricultural Chemicals (GICS Code: 15101030)

WWF CALL TO ACTION 2022

• Gas Utilities (GICS Code: 55102010)• Electric Utilities (GICS Code: 55101010)• Multi-Utilities (GICS Code: 55103010) in so far as it relates to electric and/or gas utilities (not water utilities)• Independent Power Producers & Energy Traders (GICS Code: 55105010)• Steel (GICS 15104050) in so far as it relates to metallurgical (coking) coalmining used for steel production (not steel production itself)

5

COSIGNING RESEARCHERS:
Kate Raworth (Author of Doughnut Economics / affiliation Environmental Change Institute, University of Oxford), Steve Keen (Honorary
Professor, UCL & ISRS Distinguished Research Fellow), Mogens Lykketoft (Former Danish Finance Minister, Foreign Minister and Speakerof Parliament; President of the United Nations General Assembly 2015-2016), Jesper Jespersen (Professor, dr. scient adm. Roskilde
Universitet), Jakob Vestergaard (Associate Professor, Roskilde University), Louison Cahen-Fourot (Assistant professor in Economics,
Roskilde University), Dirk Schoenmaker (Professor of Banking & Finance, Erasmus University Rotterdam, and Chair of CEPR Research andPolicy Network on Sustainable Finance), Rick van der Ploeg (Professor of Economics University of Oxford), Rens van Tilburg (Director
Sustainable Finance Lab at Utrecht University), Seraina Grünewald (Professor of European and Comparative Financial Law at the Facultyof Law, Radboud University), Jens van 't Klooster (Assistant Professor University of Amsterdam), Dirk Bezemer (Professor of Economics
of International Financial Development, University of Groeningen), Jasper Blom (Research Fellow, Sheffield Political Economy ResearchInstitute, University of Sheffield), Geoff Mann (Professor Geography, Director Centre for Global Political Economy Simon Fraser University),
Gregor Semieniuk (Assistant Research Professor Department of Economics at UMass Amherst), Josh Ryan-Collins (Associate Professor
in Economics and Finance,UCL Institute for Innovation and Public Purpose), Katie Kedward (Policy Fellow Institute for Innovation andPublic Purpose University College London), Yanis Dafermos (Senior Lecturer in Economics, SOAS University of London), Maria Nikolaidi(Associate Professor in Economics, University of Greenwich), Andrew Denis (PhD Fellow Emeritus Department of Economics City, Universityof London), Christine Cooper (Professor, Director of Research, Edinburgh University Business School), Gerhard Kling (Chair in Finance,
University of Aberdeen), Andy Agathangelou (Founder, Transparency Task Force), John Barry (Professor of Green Political Economy,
Queen’s University Belfast), Laurence Scialom (Professor of Economics, Paris X Nanterre), Marc Chesney (Profesor University de Zurich),
Sergio Rossi (Full Professor of Economics University of Fribourg, Switzerland), Philippe Thalmann (Professor of environmental economics,
Ecole Polytechnique Fédérale de Lausanne EPFL), Steven Ongena (Professor, University of Zürich, Swiss Finance Institute, KU Leuven, NTNU
Business School and CEPR), Marco Moretti (Senior Researcher at Swiss Federal Research Institute WSL), Stefan Brunnhuber (Trustee
World Academy of arts and science (WAAS)), Joscha Wullweber Heisenberg (Professor of Politics/ Political Economy, Transformation andSustainability, University of Witten/Herdecke), Dirk Ehnts (Torrens University Australia), Neil Lancastle (Senior Lecturer, De Montfort
University), Simon Szreter (Professor of History and Public Policy Fellow, University of Cambridge), Sue Konzelmann (Professor of
Economics, University of London), Emanuele Citera (Assistant Professor, St. Lawrence University), Jonathan Perraton (Senior Lecturer
in Economics, University of Sheffield), Joerg Bibow (Professor and chair of Economics, Skidmore College), Engelbert Stockhammer(Professor of International Political Economy, Kings College London), Daniele Tori (Lecturer in Finance, The Open University), Muhammad
Ali Nasir (Associate Professor in Economics, University of Leeds), Gracjan Bachurewicz (Gdansk University of Technology), Andreas
Maschke (University of Leeds), Faruk Ulgen (Professor, University Grenoble Alpes), Roy Culpeper (Chair, Group of 78, Ottawa), Adam
Barrett (University of Sussex), Frank van Gansbeke (Middlebury College).

COSIGNING ORGANIZATIONS:Good Food
Finance Network

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