Eesti Pank is a member of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The network is intended to share best practice in the field, develop environmental and climate risk management in the financial sector, and mobilise mainstream finance to support the transition toward a sustainable economy.

Eesti Pank joined the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) in 2020. The network was created in December 2017 when eight central banks and financial supervisors made a joint declaration that they would do so at the One Planet summit in Paris. The number of members of the NGFS has risen rapidly since then and it now has 69, among them all the central banks of the euro area, and it also has 13 observers.

The goal of the NGFS is to help achieve the targets set in the Paris climate agreement. It does this by addressing the risks of environmental and climate change, scale up funding for the transition to a low carbon economy, and sharing best practice. Membership of the network is voluntary and it is a forum operating by consensus.

The NGFS issues recommendations that are not binding on its members but that encourage all the central banks and financial supervisors and related partners to take the steps needed to promote an environmentally sustainable financial system.

The charter of the NGFS sets out the structure of the network.

  • The NGFS Plenary is made up of all the NGFS members and observers. The plenary appoints the chair of the NGFS as proposed by the steering committee, approves the strategy and work programme of the NGFS, decides on admitting new members and observers, and handles other questions concerning the work of the NGFS. Eesti Pank is represented in the plenary by Deputy Governor Veiko Tali.
  • The NGFS steering committee is the executive body and has a fixed set of members who prepare the strategy and work programme of the NGFS under the direction of the chair. The steering committee oversees the work and work programme of the NGFS and approves its communications following the principle of consensus.
  • Workstreams are set up at the proposal of the steering committee and handle technical and analytical work.
  • The chair of the NGFS is the main spokesperson for the network and is responsible for the management and work organisation of the NGFS.
  • Secretariat services are provided by the Banque de France working with other central banks. The secretariat supports the operation of the network and helps organise administrative work.

The NGFS has three workstreams.

  • The microprudential workstream maps current supervisory best practices, encourages the disclosure of climate risks, and clarifies the differences between green and brown assets.
  • The macroprudential workstream assesses the scale of the impact climate risks could have on the economy, identifies the channels through which climate risks are spread in the economy and financial system, and maps the areas where further research is needed.
  • The workstream on scaling up green finance sets an example of how central banks and financial supervisors could act more sustainably, monitors the market dynamics for green financing, and works to amplify green financing.
  • The workstream on bridging the data gaps identifies a list of data items needed for the purpose of other NGFS workstreams, determines the availability, the sources and limitations for accessing the relevant data, and produces a public list of missing data items and calls for external stakeholders to bridge it.
  • The workstream on research updates the list of NGFS research questions on a regular basis in relation with the other NGFS workstreams, ensures the smooth coordination of research efforts within the NGFS working structures, and develops the relationship with the NGFS research stakeholders.

Eesti Pank contributes to the work of the NGFS by participating in the macroprudential workstream, which Riina Hanso from the Eesti Pank financial stability department attends.