Central Bank governor reminds financial companies of climate obligations

Central Bank governor Gabriel Makhlouf has written to regulated financial services providers to remind them of their statutory obligations on climate and sustainability, saying the financial system "must play its part" in addressing the climate emergency.

The bank announced the establishment of a Climate Risk and Sustainable Finance Forum, which will be known as the Climate Forum, which it said would “bring to together stakeholders to build a shared knowledge and understanding of the implications of climate change for the Irish financial system”.

The first meeting is expected to take place in the coming months.

Issue

"Climate change is a critical issue for society. The financial system must play its part in addressing it and firms can expect follow-up from the Central Bank, including engagement through the new Climate Forum and interaction on a range of broader regulatory and supervisory perspectives," Mr Makhlouf's letter concludes.

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As "finance day" unfolded at the Cop26 climate change conference in Glasgow – with remarks from UK chancellor Rishi Sunak, US treasury secretary Janet Yellen and former Bank of England governor Mark Carney, among others – the Central Bank said it was reaffirming its own climate change commitments.

It has established a dedicated unit “to bring additional focus” to its work on the issue.

“Central banks have an important role in mitigating the effects of climate change. Climate change is already having profound effects on the world’s societies and economies but we can alter its future path if we start taking action now as we transition to a carbon neutral society,” Mr Makhlouf said.