Foreword
The Riksbank is an independent authority under the Riksdag, which operates in accordance with the Sveriges Riksbank Act. The central government’s core values guide the Riksbanks operations.
The Riksbank also has a Sustainability Strategy that specifies how the Riksbank takes sustainability into account in its internal operations and policy work.
The main focus of this report is on the Riksbank’s climate-related work which is an important part of the Riksbank’s sustainability-related work. The report also includes a description of what the new Sveriges Riksbank Act, which entered into force at the beginning of the year, means for the Riksbank’s sustainability- and climate-related work.
The Executive Board made a decision regarding this report on 24 January 2023.
Published: 25 January 2023
The Riksbank’s Climate Report 2023 - in brief
Climate change and measures to promote the transition to a sustainable economy have consequences for actors throughout society, including the Riksbank. This is therefore an important issue for the Riksbank to monitor and analyse. However, the responsibility for putting in place policy measures against climate change lies primarily with the world’s governments.
In its asset purchases and asset management, the Riksbank takes into account the risks associated with climate change and climate transition. The Riksbank takes sustainability into account in the selection of assets in the foreign exchange reserves as far as this is possible, without affecting the Riksbank’s ability to carry out its main task. The Riksbank also reports the carbon footprint of the foreign exchange reserves. During the period in which the Riksbank purchased corporate bonds, various measures were introduced to take account of, and report on, sustainability.
Climate change and the transition to a sustainable economy create risks that could jeopardise both price stability and financial stability. This would affect the Riksbank’s ability to fulfil its mandate and the Riksbank therefore needs to gain an understanding of how these risks affect the economy. To reduce financial risks, it is important that agents across the entire financial system take responsibility for identifying, assessing and managing climate-related risks in their operations to the greatest extent possible.
In 2022, the Riksbank carried out an analysis of transition risks in the Swedish banks’ loan portfolios using the PACTA method. A preliminary examination of other methods and in-depth studies has been undertaken and will form the basis for further analytical work.
The new Sveriges Riksbank Act requires the Riksbank to identify threats to sustainable development that affect the conditions for its activities, and to pay particular attention to how sustainable development can be promoted in its asset management. The overriding objective of the Riksbank remains price stability and, without prejudice to this objective, the Riksbank shall also contribute to a balanced development of output and employment. The Riksbank shall also assess the stability and efficiency of the financial system. This includes identifying and assessing risks linked to climate change.