, face constrained choices regarding the composition of their reserves portfolio. as a result, they remain committed to liquidity and security constraints and their strategic asset allocation ( saa ) allows little room for esg - based holdings. other central banks with adequate levels of reserves may have more flexibility in diversifying their portfolio composition to ensure a reasonable dosage of esg - compliant holdings. usually, the incorporation of esg criteria by central banks falls under three categories : the first is negative screening which is the most widely used. it simply consists of excluding sectors or companies from the investment universe based on ethical, moral or scientific grounds, e. g., companies with poor environmental credentials. in our case, 2 / 4 bis - central bankers'speeches we have invested in an esg fund denominated in euro. as part of our internallymanaged corporate bond portfolio, we have adopted the negative screening and exclusion ( un sanction list ). the second category is thematic investing. this directs investment towards specific themes which are expected to improve risk - adjusted return and as well as bring along ancillary societal benefits. the third category is impact investing which is more results - oriented and which looks at policy outcomes alongside financial outcomes. to illustrate, some central banks have already taken steps to incorporate environmental sustainability considerations within their reserve management framework. progress on this front is varied. banque de france, banco de mexico, norges bank are pioneers in the fields. others are still at the beginning of the journey, as challenges persist. in the case of the bank of mauritius, in june 2021, the bank came up with a guide for the issue of sustainable bonds. the document provides an overview of the requirements and process for the issuance of sustainable bonds and the listing of these bonds on exchanges licensed in mauritius. it also seeks to ensure the integrity of the sustainable financing ecosystem in mauritius and to prevent inter alia " green washing ". according to the world bank, challenges are four - fold. first, a uniform definition of esg is still lacking. second, there is a lack of coherent and consistent accounting and reporting framework and disclosure requirements across jurisdictions. third, measuring the impact of esg considerations on financial returns is still inconclusive. fourth, monitoring progress and appraising performance is difficult in view of lack of availability of proper benchmarks. challenges tied to the process of gathering and analyzing data may also inhibit the smooth incorporation of esg considerations into an investment and asset allocation framework. ladies and gentlemen

harvesh seegolam : current challenges and the pathway to the greening of reserves management keynote speech by mr harvesh seegolam, governor of the bank of mauritius, at the pan african central bank conference on risk and reserve management, port louis, 22 june 2023. * * * governor deputy governors distinguished guests members of the press ladies and gentlemen all protocol observed a very good morning to all of you. let me join my deputy governors in extending a very warm welcome to the governor, deputy governors and representatives of central banks to mauritius. it is with pleasure that the bank of mauritius is hosting this pan african central bank conference on risk and reserve management. i am sure that the last two days have broadened your perspective and equipped you with the requisite knowledge to enhance your skills in the subject matter. i would also want to laud the german agency cooperation ( giz ) and allianz global investors for this initiative across the sadc region, as well as acknowledge the continuous support of the wits business school, university of witswatersrand from south africa. my address today will be on a highly topical issue which is increasingly hogging the limelight of sustainable central banking. ladies and gentlemen, according to the world economic forum, around 50 % of global gdp is moderately or highly dependent on nature. weather - related disturbances around the world are becoming more frequent and chaotic. climate - related disasters and their unpredictable patterns have been detrimental to many economies. what is striking with these disturbances is that a localized weather - related shock can unsettle the entire climate pattern throughout the world and generate weather - related hazards in other parts of the world. examples abound, like wildfires in australia, droughts in africa, and floods in haiti. the list goes on. we have already reached the tipping point regarding the climate issue and the sustainability agenda needs to be at the forefront for us to stand at least a fighting chance. failure to do so will irremediably move us from the covid frying pan into the climate fire. due to the negative externalities that a weather hazard can pose across countries, efforts spearheaded to address those cannot be limited at the individual country level. rather, it has become increasingly conspicuous that a global coordinated effort is required to mitigate the problem and adapt to it so that we may protect the planet and preserve inter - generational legacy. 1 / 4 bis - central bankers'speeches with this in mind, leaders of nations signed the