Climate change is one of the greatest challenges of our time and affects the core tasks of a central bank. Against this backdrop, the Bundesbank is publishing its third climate-related disclosures. These include climate metrics on its non-monetary policy financial investments, namely the euro portfolio and foreign currency reserves.

The report involves two major additions. For the first time, it examines the potential impact of physical climate risks – such as droughts and floods – on those countries whose bonds the Bundesbank holds as part of its foreign currency reserves. As one of the world’s first central banks, the Bundesbank also reports on climate-related aspects of its gold holdings.

The disclosures are part of the Eurosystem-wide climate-related disclosures on the non-monetary policy portfolios (NMPPs). The climate-related disclosures are based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Partnership for Carbon Accounting Financials (PCAF).

The TCFD framework supports companies and investors in reporting on climate-related financial risks and opportunities. The PCAF is a financial industry-led initiative that provides guidelines for consistent and comparable assessment and calculation of financed emissions across the financial industry.