The Riksbank expands its reporting of climate-related information
Economic Commentaries, News The Riksbank starts publishing the carbon footprint of the assets in the foreign exchange reserves. The carbon footprint of the Riksbank’s foreign exchange reserves was 298,000 tonnes of carbon dioxide equivalents per billion dollars of GDP on 31 March 2022. This is the conclusion reached by Emma Brattström and Ruzica Gajic, authors of a new Economic Commentary about the carbon footprint of the Riksbank's foreign exchange reserves. It is important for the Riksbank to understand whether and how climate change affects the value of its financial assets. By calculating and accounting for the carbon footprint of foreign exchange reserve assets, the Riksbank is contributing to transparency about climate-related information.
Read the entire Economic Commentary: The carbon footprint of the assets in the Riksbank’s foreign exchange reserves
"The purpose of this Economic Commentary is to calculate the carbon footprint of the Riksbank's foreign exchange reserves while also analysing the calculation method," says Ruzica Gajic, analyst at the Markets Department. The calculation is in line with the recommendation for central banks drawn up by the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). This in turn is based on recommendations from the Task-Force on Climate-related Financial Disclosures (TCFD). The result is expressed using the measure carbon intensity. Seen over the past five years, the carbon footprint of the assets in the Riksbank's foreign exchange reserves issued by states and regions has decreased by two per cent.
Forward-looking measures are also needed
To obtain a more comprehensive analysis of the climate-related risks of the foreign exchange reserves, one needs to supplement backward-looking measures of greenhouse gas emissions – such as carbon intensity – with forward-looking measures of transition risks. Such measures show the scale and cost of the transition required in a country to reduce emissions. There is at present no single measure that can show the size of transition risks for a country, but this is currently being developed.
The authors’ analysis forms part of the Riksbank’s work on examining how one can measure climate-related financial risks for the assets in the foreign exchange reserves. The Riksbank will continue to analyse issues relating to climate-related risks in financial asset management and also follows the work of relevant international organisations, networks and standard-setting bodies.
Read Economic Commentaries in a new format
This Economic Commentary is published in a new format, as a web report directly on our website, to make it easier to read the report digitally. The report's homepage also has a pdf version available for those who want to download and save or print it.