For central banks or prudential authorities, three questions arise: that of financing –and interaction with monetary policy–, that of information – and of disclosure–, and lastly that of time horizons –and stress tests–. 1. The question of financing: what interaction with monetary policy? Climate change is likely to affect the price of goods and services. It has a direct impact on food prices. But it will also more generally affect growth and the allocation of resources. Against this backdrop, central banks should remain vigilant about, and possibly monitor the economic consequences of climate change. And monetary policy will have to play its role of contributing to a smoother rebalancing of price structures, in line with its price stability mandate. Article 2 of the European System of Central Banks statute states: “Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community, with a view to contributing to the achievement of the objectives of the Community [economic activities, sustainable and non-inflationary growth respecting the environment…the raising of the standard of living and quality of life]. Some would like to go a step further, using the quantitative easing tool to help finance the energy transition, purchasing “green” assets, granting favourable treatment to green assets that are eligible as collateral, or setting up dedicated long-term facilities; the list of possibilities is long. However, we must bear in mind the ultimate aim of monetary policy. It is designed to achieve macroeconomic objectives, not sector-specific goals.

First, the major public financial institutions were at the forefront of this movement. This is the case for the European Bank for Reconstruction and Development or the Caisse des Dépôts, with its subsidiary CDC-Climat. The European Investment Bank estimates that it currently grants 25% of its loans – over EUR 20 billion per year – to “green” projects. Second, under the aegis of the United Nations, projects were launched such as the UNEP finance initiative, a partnership between the United Nations Environment Programme and 200 financial sector institutions, which make environmental sustainability a collective responsibility, share best practices and establish principles for green financing. Thanks to the Montreal climate change protocol, or to the Portfolio Decarbonization Coalition, signatory investors commit to measuring and disclosing the carbon footprint of their portfolios. The objective is ambitious: reduce investment in carbon-intensive projects by several hundred billion dollars. Lastly, financial institutions are now making more direct commitments. French banks and insurance companies have recently announced that they have withdrawn their support for the coal industry and increased their financing of renewable energies. Paris Europlace called for the creation of an energy transition fund, which would be invested in by French banks, insurers and asset management companies, and which could in turn invest EUR 10 billion by 2020, with a view to financing projects to improve energy efficiency or promote renewable energies. This is a commendable initiative. II/ To best align these private initiatives with the fight against global warming, which is a public good, public intervention is nevertheless necessary.