The Riksbank’s work on sustainability
Long-term sustainability is a key issue for the future. The Riksbank works both to strengthen the sustainability of its internal operations and to adapt its work on price stability and a safe and efficient payment system to more sustainable development. The Riksbank has developed a strategy and has decided on six principles to consider sustainability in its policy work.
Sustainable social development
By sustainable development, the Riksbank means what has by now become a commonly-used definition, namely developments in society that meet today’s needs without compromising the possibilities of future generations to meet their needs, and in which consideration is given to economic, ecological and social aspects. This definition of sustainable development comes originally from the United Nations and is used by the Government of Sweden and the Riksdag, among others. The Riksbank is a public authority under the Riksdag and the state’s core values guide the work of the Riksbank.
The Riksbank uses the 2030 Agenda as a basis for its work
The 2030 Agenda - a resolution adopted by the General Assembly of the United Nations in 2015 - identifies 17 goals for sustainable development. Several of these goals have a bearing on the Riksbank’s operations, for example those concerning climate change, sustainable consumption and production, decent working conditions, equality and global partnership.
Principles for the Riksbank’s sustainability work
The Riksbank has decided on six principles to consider sustainability in its work:
- The Riksbank’s work uses the United Nations’ 2030 Agenda as its starting point.
- The Riksbank shall analyse climate change and developments in the area of sustainability to understand how the economy as a whole is affected and thus how the Riksbank can best carry out its policy tasks.
- The Riksbank is to act for international cooperation to promote sustainable development and reduce the risks linked to climate change. Consequently, in line with the intentions of the Riksdag and the Government, the Riksbank shall act for regulation of the financial system that reduces risks linked to climate change.
- The Riksdag and the Government have main responsibility for conducting climate policy in Sweden. The Riksbank can contribute the means available within its mandate, and as a complement to other policy. However, the most effective measures to limit climate change fall within the remit of other policy areas.
- The Riksbank is obliged to ensure that its operations are run efficiently and that it uses public finances prudently. It follows on from this that the Riksbank, among other things, shall manage the risks that arise when purchasing corporate bonds, especially risks to the Riksbank’s financial position. Some of these risks are linked to sustainability on the basis of the assumption that it is more risky to buy bonds issued by companies that are breach of universal norm-based principles.
- The Riksbank is to apply a sustainability perspective in management of the foreign exchange reserves. The Riksbank’s financial risk and investment policy describes how this is to be implemented.
What can the Riksbank do to help sustainable social development?
Within the scope of its mandate, the Riksbank is to contribute to limiting climate change by, for instance:
- Promoting regulation of the financial markets that reduces the risks climate change may entail for the financial system. This could be stress tests, reporting climate-related risks or banks’ capital adequacy requirements.
- Taking a sustainability perspective in its asset purchases and in the management of the foreign exchange reserves under the framework of the Riksbank’s mandate.
- Participating in various international networks that work on climate-related issues, for instance, the International Monetary Fund, the- Financial Stability Board (FSB), the Basel Committee and the Network for Greening the Financial System (NGFS).
- Initiating internal processes to ensure, in the longer run, that its own activities are in line with international agreements, such as the Paris Agreement, and do not unnecessarily contribute to global warming.
- Helping to increase knowledge of the effects of climate change on the economy by supporting and contributing its own research. Together with other institutions, the Riksbank has contributed to research on climate change since 2016.