CO2 balance: Bundesbank publishes first climate report

In a report, the German central bank has disclosed climate indicators for parts of its investments for the first time. Currency watchers largely do not provide monetary policy buying figures.

The Bundesbank presented its first climate report today. In the report, the central bank publishes calculations of greenhouse gas balances and other climate indicators for parts of its investments, among other things. In particular, the Bundesbank’s own investments were measured, which have nothing to do with the purchase of securities of European Central Banks (ECBs).

These Bundesbank investments mainly include Pfandbrife, so-called covered bonds issued by banks, largely secured by real estate mortgages and amounted to EUR 10.4 billion most recently. According to the central bank, the company’s most recent CO2 footprint of these securities in its portfolio was 0.13 tonnes of CO2 per million euros invested.

The “green” and “brown” portion of the portfolio

Compared to commercial banks, comparatively lower values ​​were calculated, the Bundesbank explained. However, greenhouse gas emissions financed by commercial banks through their investments or loans were not included in the calculation. The data status here is still insufficient. The proportion of a bank’s own portfolio that directly promotes environmental protection or is “green” is just under two percent, compared to 0.4 percent for European banks. The environmentally harmful or “browning” portion is a good 0.1 percent, compared to 0.8 percent for commercial banks.

The Bundesbank’s climate report is based on specifications from the US Task Force on Climate-Related Disclosure (TCFD). This sustainability framework, created by the Financial Stability Board, defines what information is included in a corporate or institutional sustainability report. Such frameworks also exist, for example, from the Sustainability Accounting Standards Board (SASB) or the Global Reporting Initiative (GRI).

Future Information on Corporate Bonds

The Bundesbank report deals with the topics of governance, strategy, risk management and key statistics and goals. In the area of ​​risk management, companies or organizations must disclose what climate-related risks they have identified and how they deal with them.

The Bundesbank omitted climate indicators in the report on monetary policy purchases of government and corporate bonds – the volume of which exceeds its portfolio by several times. The ECB intends to publish climate indicators for the corporate bond purchase program for the first time next year.