Frank Elderson: The NGFS Glasgow Declaration - From a coalition
of the willing to a coalition of the committed
Keynote speech by Mr Frank Elderson, Member of the Executive Board of the European Central
Bank, at the COP26 Finance Day Presidency Event on "A Financial System for Net Zero",
Frankfurt am Main, Glasgow, 3 November 2021.
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Our collective journey started in Paris almost four years ago, when eight central banks and
supervisors from an already diverse background decided to join forces. Our aim was to rise to
the climate challenge and work together to develop the tools we need as central banks and
supervisors to foster and accelerate the greening of the global financial system.
As a coalition of the willing, we have been working together in the Network for Greening the
Financial System (NGFS), which I am proud to chair. Over time, others have joined us in our
efforts. And I am delighted to announce here today that our network is welcoming the supervisory
authorities of Turkey and Jersey and the central banks of Jordan, the Dominican Republic and
Peru. This means that the NGFS - and I am also very proud of what I am about to announce right
now - now brings together a total of 100 central banks and supervisors. Our network is both
enriched by its diversity and strengthened by the shared determination of its members to
address climate change and environmental issues within and because of their mandates.
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Since our Call for Action report of April 2019 , we have developed and shared practical tools and
knowledge, most notably in the fields of prudential supervision, climate scenario analysis,
responsible investment, the inclusion of climate-related considerations in monetary policy
frameworks, data gaps, and building awareness and intellectual capacity.
Based on our collaborative work, NGFS members have taken very concrete actions towards
greening the financial system. The examples provided by the previous panellists are a very telling
illustration of this dynamic, and many others in our network could share similar experiences.
But I have not just come here to announce that our network now brings together 100 members. I
am also extremely pleased to announce that today the NGFS is publishing its Glasgow
Declaration entitled "Committed to Action", in which we reiterate our willingness to contribute to
the global response required to meet the objectives of the Paris Agreement. And we make
concrete commitments on what we will work on and deliver in the coming years, covering all the
core activities of our network of central banks and supervisors.
Looking ahead, we will deepen, amplify and strengthen our collective work and efforts. We will
continue to make the financial system more resilient to climate-related and environmental risks
and encourage the scaling-up of the financing flows needed to support the transition towards a
sustainable economy.
To do so, in the coming years the NGFS will further enhance and enrich its climate scenarios.
We will deepen our analytical work on how climate change might be taken into account in the
conduct of monetary policy. We will intensify our work to bridge climate-related data gaps. We
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will publish guidelines on TCFD-aligned reporting for central banks. We will step up our efforts
on capacity building, with a particular focus on members from emerging and developing
economies. And we will continue to explore emerging topics, such as the impact of biodiversity
loss or the risks associated with climate-related litigation, and work towards addressing them.
The NGFS can only be as strong as the community supporting its work, and its collective
achievements help to foster climate action by its members. This is why I am very happy to say
that, in addition to our Glasgow Declaration, almost two thirds of NGFS members are taking the
opportunity of COP26 to publish an individual pledge or strategy. Taken together, these clearly
demonstrate that our network is determined to act and fulfil its responsibilities.
These pledges and strategies show that the integration of climate-related and environmental
risks into financial stability monitoring and microprudential supervision is on the way to becoming
a reality. Indeed, almost all the pledges and strategies involve actions to strengthen
microprudential and macroprudential climate-related supervision - by using scenario analysis
including climate stress tests, by issuing supervisory expectations or guidance, or by
encouraging their organisations to build capacity.
These pledges and strategies clearly signal the new frontier of the NGFS's work: many of them
encompass actions to further explore options to integrate climate-related considerations into
monetary policy or to move towards more disclosures on their organisations' activities.
In Paris, almost six years ago, the parties to the UN Framework Convention on Climate Change
set a goal: to "make financial flows consistent with a pathway towards low greenhouse gas
emissions and climate-resilient development". We - central banks and supervisors of the NGFS
- have heard you very clearly and have sought to take action, within our mandates, to contribute
to this goal. While governments are in the driving seat to lay out policies and set ambitious
transition paths, we are committed to playing our part and fulfilling our responsibilities, within our
mandates, to support and contribute to a successful transition to net zero. With today's
announcement of the NGFS Glasgow Declaration - Committed to Action - our network of 100
central banks and supervisors is no longer just a coalition of the willing: we are a coalition of the
committed.
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NGFS (2019), A call for action: Climate change as a source of financial risk, April.
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Reporting standards that are aligned with the recommendations issued by the Task Force on Climate-related
Financial Disclosures.