The document follows and deepens the Banco de Portugal’s Commitment to Sustainability and Sustainable Finance, published in March 2020 and covering the 2020-21 period.

It provides the context for the Banco de Portugal’s involvement in ESG sustainability, takes stock of the work carried out so far and describes the generic approach followed by the central bank community. At the Banco de Portugal, the work carried out has mostly focused on environmental concerns  –  in particular climate change – as these are an important source of risk for the balance sheets of financial institutions and have potentially relevant macroeconomic implications for the conduct of monetary policy. The document now published also recognises the importance of the social and governance pillars.

The Banco de Portugal’s sustainability priorities (‘focus areas’) are identified taking into account the Bank’s broader strategic priorities for the next four years, as set out in its Strategic Plan 21-25. There are three focus areas:

• Integrating climate risks into the missions of the Banco de Portugal;
• Reinforcing ESG sustainability in internal management;
• Promoting ESG awareness among employees and external stakeholders.

For each of these areas and under the motto ‘Acting for Sustainability’, the document explains which initiatives the Banco de Portugal commits to developing.

The outcomes will be published in the Annual Report of the Banco de Portugal on an annual basis.