Green Finance ¦ Deutsche Bundesbank

Our mission

We take systematic account of sustainability considerations in the fulfilment of our mandate and incorporate them into our actions: through our analysis and our active participation in forums, we are improving the management of sustainability risks and putting our business operations on a sustainable footing. By doing so, we are contributing to sustainable structural change and acting as a role model.

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How climate change generates financial risks

Climate risks are also financial risks. Firstly, extreme weather events like droughts, floods or rising sea levels can have economic consequences. Secondly, the transition towards a sustainable economy may generate risks, for example if carbon taxes rise significantly or consumer preferences change. This may influence key economic indicators such as growth and inflation, or the stability of the financial system. In other words, climate risks also impact the core tasks of a central bank. In its work, the Bundesbank therefore analyses and takes into account sustainability and climate-related risks. We have also intensified our analysis of how nature and biodiversity loss affect the economy. The mechanisms at play are shown in the chart. More detailed information can be found in this report.

International cooperation: Sabine Mauderer as Chair of the NGFS

At the start of 2024, the Bundesbank’s First Deputy Governor Sabine Mauderer took office as Chair of the Network for Greening the Financial System (NGFS), a global group of central banks and supervisory authorities committed to forging a more sustainable financial system. The NGFS aims to strengthen the role of the financial system in risk management and to mobilise capital for green and low-carbon investment. It analyses the impact of climate change and nature loss on the financial system and promotes the sharing of best practices.
Further information on the NGFS can be found here.