On 22 March 2021, the Dutch Central Bank (De Nederlandsche Bank, DNB) published its first progress report on financial climate-related risks and opportunities in its areas of responsibility. This report has been incorporated in annex 1 of DNB’s annual report for 2020 (the annual report is currently only available in Dutch; the English version will be published in May 2021).
In the progress report, DNB follows the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). The steps DNB has taken to identify and mitigate climate-related risks in its areas of responsibility (asset and liability management, supervision of the financial sector, economic advice and statistics) have been disclosed. For example, DNB carried out a stress test to examine its balance sheet in relation to risks resulting from energy transition. Furthermore, DNB identified the carbon footprint of its own-account investments.
The progress report also sets out DNB’s priorities in the area of sustainability in 2021. These include, but are not limited to, the publication of a study on embedding material sustainability risks in the internal risk measurement and risk assessment performed by financial institutions. This study will provide insight into the extent to which banks, insurers and pension funds have sufficiently included sustainability risks. DNB is also developing a method for the (composition of) CO2 footprints at a sector and institutional level; DNB will be publishing the first CO2 indicators for the most important Dutch financial sectors.
DNB notes that it has based its progress report on the globally adopted recommendations issued by the TCFD, making DNB one of the first central banks in the world to report in accordance with this approach (following in the footsteps of the Bank of England).