The European Union has launched a finance policy on the road to sustainability, but it is not clear whether this change can take place at the size and speed expected, to respond to the crisis of our time. The network of central banks and financial supervisors (NGFS), released a report in March, in which it found that the climate crisis poses a growing risk to financial stability. In all possible scenarios, climate-related risks will have consequences for the economic outlook, for the financial system in which central banks operate and, therefore, for the conduct of monetary policy.
European Central Bank President Christine Lagarde said about the report that “climate change is not the primary responsibility of central banks, but equally I think no one can get a pass” on this emergency.
Several studies indicate that the issue of sustainability is increasingly present on the agenda of investors and policy makers. It is not clear, however, whether the banks will find sufficient incentives to spontaneously move towards ESG (Environmental, social governance) criteria or whether it is necessary to “force them”, with regulatory prescriptions. It should be remembered that the European Parliament, with a resolution adopted on 13 November, formulated precise legislative proposals to widen the flow of investments destined for the Green Deal.
An open source study published in April by the Italian University La Sapienza explains the reasons that move banks to make choices in favor of the environment and the social sector. Analyzing data from 43 banks in 14 European countries, the results indicate that, at this stage, the input of supervisory authorities is likely to be the main driver for pushing banks to support the green transition.
