report / study

National Bank of Belgium takes key steps towards a sustainable and inclusive net-zero economy

ID 22666

The National Bank of Belgium made a significant effort in its efforts to achieve a sustainable and inclusive net-zero economy by releasing its Sustainable and Responsible Investment Charter and its report on Climate-related Disclosures for Non-monetary Policy Portfolios.
The publication of these documents demonstrates the bank’s commitment to SRI, as the Charter outlines a framework for integrating these principles into the management of the bank’s own reserves. The SRI principles have increasingly been shaping the bank’s activities, including the management of its non-monetary policy portfolios. Sustainability is now considered the fourth objective of the bank’s strategic asset allocation policy, alongside liquidity, safety, and return.
The SRI Charter builds on existing practices, such as issuer exclusion processes, and incorporates best practices and insights from the international context, such as guidance from the Network for Greening the Financial System. It outlines a framework for considering sustainability and responsible investment aspects in the management of the bank’s own reserves. The Charter is based on a double materiality perspective, meaning it is concerned with both how sustainability issues affect companies in which the Bank invests and the impact of these companies on society and the environment. The Bank aims to address the impact of environmental, social and governance-related risks on its investments and support the transition to a sustainable and inclusive net-zero economy. The charter will guide the bank’s investment strategies and activities, serving as a reference for the teams responsible for their design and execution.
The Climate-related Disclosures report is based on a growing awareness of the significance of climate-related risks for investment portfolios. The bank’s first disclosures on climate-related risks and opportunities offer transparency on the greenhouse gas emissions associated with managing its own reserves. The bank considers climate-related risks as factors that amplify existing financial risks, such as market and credit risks. The bank follows the TCFD guidance and has defined three time horizons relevant for the identification of climate-related risks and opportunities: short-term (12 months), medium-term (1 to 10 years), and long-term (10 to 30 years). The bank has integrated climate-related risks into its entire risk management framework and aims to contribute to the development of climate-related risk management within the Eurosystem. These disclosures initiate an annual reporting cycle that will support the bank’s internal efforts on climate change and inform external stakeholders.
The bank aims to ensure transparency in line with the disclosure pillar of the SRI Charter by providing adequate information to the public on the impact of climate-related risks on its portfolios and their management. The disclosed metrics include emissions the bank has financed as an asset owner, referred to as the „financed emissions“ share of its Scope 3 emissions. The disclosure methodology follows the recommendations of the TCFD and was jointly developed by the national central banks of the Eurosystem and the European Central Bank, providing a uniform approach that is particularly beneficial for calculating climate-related metrics.

Other Features
accounting
banks
best practice
code of conduct
companies
credit
disclosure
ESG - environmental factor
ESG - governance factor
ESG - social factor
ESG disclosure
FATF High-Risk Jurisdictions
financial stability
governance
green bonds
issuer
liquidity
process
reporting
resilience
risk
risk management
shareholders
sustainability
taxation
transparency
Date Published: 2023-04-04
Regulatory Framework: Taxonomy Regulation (TR), TCFD Implementing Guidance
Regulatory Type: report / study

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