Approach to sustainability
The Banco de Portugal, like most central banks and financial supervisors, has been incorporating environmental, social and corporate governance (ESG) sustainability factors into its policies and internal management.
Environmental concerns and, within these, climate change-related concerns have received greater attention from the Banco de Portugal and central banks in general, as they constitute an important source of risk to the balance sheet of financial institutions and also because of the potential impact on the conduct of monetary policy.
The Banco de Portugal’s approach to ESG sustainability is reflected in the Acting for Sustainability document, which provides an integrated view of the Bank’s position and sets out the guidelines and priorities that will steer its actions in the next four-year period, in line with the Strategic Plan for 2021-25.
Until 2025 the Banco de Portugal will pursue three focus areas to enhance ESG sustainability within its mandate:
- Area 1 – Integrating climate risks into the missions of the Banco de Portugal
- Area 2 – Reinforcing ESG sustainability in internal management
- Area 3 – Promoting ESG awareness among employees and external stakeholders.
The initiatives to be accomplished under each focus area will be defined every year and monitored by the Sub-Committee for Sustainability and Sustainable Finance, the structure that coordinates ESG sustainability-related work at the Banco de Portugal.
[Jan 2020] Lisbon Green Capital 2020 commitment
Central Banks and Supervisors Network for Greening the Financial System (NGFS)
WS1 - Microprudential/ Supervisory
WS2 - Macrofinancial
WS3 - Scaling Up Green Finance
WS3 subgroup - Monetary policy
WS3 subgroup - Portfolio management
WS3 subgroup - Central Bank Disclosures
WS3 subgroup - Market Transparency
WS4 - Bridging the data gaps
WS5 - research
Advisory Committee on Green Bond Initiative
MOC - Monitoring Working Group (MWG) - Sustainable and Responsible Investment Task Force (SURI)
MPC workstream on climate change
WGF Expert Team on Climate Change
GT Green ECB (Environmental Network of Central Banks)
NCA climate risk contact group
Sustainable Finance Network
Sustainable Finance Network;
Sustainable Finance Network
ESRB Joint ATC-FSC work on climate risk monitoring (WS1 – Data and measurement)
ESRB Joint ATC-FSC work on climate risk monitoring (WS2 – Modelling climate risk and establishing a firmer base for policy instrument calibration)
ESRB Joint ATC-FSC work on climate risk monitoring (WS3 – Mapping a growing body of analytical findings to policy options)
Grupo de Reflexão para o Financiamento Sustentável (think tank on sustainable finance)
National Council of Financial Supervisors
Contact group for sustainability and sustainable finance.
- Law No 98/2021 of 31 December 2021; Climate Framework Law. (in Portuguese only)
- Circular Letter No CC/2021/00000010 of the Banco de Portugal, of 15 April 2021; Establishes supervisory expectations on the management of climate and environmental-related risks [for the less significant institutions under its direct supervision]. (in Portuguese only)
- Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment; Taxonomy Regulation.
Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and presentation of information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure obligation; Article 8 Disclosures Delegated Act.
Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives; Climate Delegated Act.
- Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019 amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks; Climate Benchmarks Regulation.
- Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector; Climate Disclosures Regulation.
- Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups; Non-Financial Reporting Directive (NFRI).
[01.04.2022] NGFS discloses its annual report
[15.09.2021] Address by Director Luís Laginha de Sousa at the "ESCB: Towards a Green and Digital Future? - 2nd Webinar organized for SCECBU’s Trade Union Members": "Central Banks and Environmental Sustainability"
[10.05.2021] Presentation by Pedro Duarte Neves, “Climate Change Stress Testing” for the course Macro-Prudential Policy: Implementing the Financial Stability Mandate, organised by the Central Banking Institute
[07.03.2019] Address by Director Luís Laginha de Sousa at the Green Financing Meeting between the Banco de Portugal and the delegation of Representatives of the Pan-Pearl River Delta, China (in Portuguese only)
“The role of supervisors and central banks in the climate crisis”, keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the 31st Lisbon meeting between the central banks of Portuguese-speaking countries
[11.10.2021] The Banco de Portugal’s Online Financial Stability Conference, “Climate Change and Financial Stability”, keynote Speech by Mark Carney, former Governor of the Bank of England and United Nations’ Special Envoy for Climate Action and Finance
Macroeconomic research and analyses
[Oct 2021] “Climate change and the economy”, Special Issue, Economic Bulletin, pp. 44-72“Assessment of the exposure of the Portuguese banking system to non-financial corporations sensitive to climate transition risks”, Ricardo Marques and Ana Margarida Carvalho, Occasional Papers 01/2021
Financial stability and prudential supervision
[Jun 2021] "Avaliação da exposição do sistema bancário português a sociedades não financeiras sensíveis aos riscos climáticos de transição", Ricardo Marques e Ana Margarida Carvalho, Occasional Papers 01/2021
The Banco de Portugal has improved the energy efficiency of its operations and reduced its carbon footprint.
In 2020, a new energy contract was concluded for all the Bank’s buildings, except the regional delegations of Azores and Madeira, which provides for the supply of 100% renewable energy.