Sustainable Finance refers to the integration of environmental, social and governance aspects into the decision-making of financial players. Following the Paris Agreement, efforts have particularly focused on climate change mitigation and climate change adaption. In this context, banking supervision is faced with the task of ensuring that sustainability risks, including climate-related risks and risks resulting from the transition to a more sustainable economy, are appropriately taken into account by the institutions.

The Bundesbank is therefore actively involved in the work of several expert committees and working groups at the national as well as international level. For example, within the Network for Greening the Financial System (NGFS), a global network of central banks and supervisors that was co-founded by the Bundesbank, several working groups analyse the implications for micro- and macro-prudential supervision. In addition, the Bundesbank participates in the work of the Basel Committee on Banking Supervision (BCBS), the European Banking Authority (EBA) and the European Central Bank (ECB) on the management of sustainability risks. Finally, the revision of the European supervisory framework (CRR and CRD) further integrates ESG risks into disclosure and risk management requirements as well as supervisory powers.

At the national level, the Bundesbank assumes the role of an observer in the Sustainable Finance Committee of the German government and cooperates closely with the BaFin, including on the publication of the BaFin Guidance Notice on Dealing with Sustainability Risks in December 2019. The contents of this guidance were then formalised into binding requirements with the 7th amendment of the minimum requirements for risk management (MaRisk) in 2023.