National Bank of Belgium takes key steps towards a sustainable and inclusive net-zero economy

On 29 March, the National Bank of Belgium published its Sustainable and Responsible Investment Charter and climate-related financial disclosures, two documents marking major progress on its journey towards a sustainable and inclusive net-zero economy.

By publishing these documents, the National Bank expresses its commitment to sustainable and responsible investment (SRI). The Sustainable and Responsible Investment Charter lays out a high-level framework for the inclusion of such aspects in the management of the Bank’s own reserves. Indeed, SRI principles have been increasingly shaping the Bank’s activities, including the management of its non-monetary policy portfolios. In that regard, the Bank considers sustainability to be a fourth objective of its strategic asset allocation policy, alongside liquidity, safety and return.

The SRI Charter builds on previous efforts and existing practices (such as issuer exclusion processes) and is intended to inform and guide the Bank’s non-monetary policy portfolio management. The SRI Charter is supplemented by best practices and incorporates insights and experience from the international context, such as guidance by the Network for Greening the Financial System. Alignment with international standards has also been ensured, for instance to assess green or social bonds. The SRI Charter will serve as a reference for the teams engaged in the design and execution of the Bank’s investment strategies and activities.

Similarly, the disclosure document is based on growing awareness of the importance of climate-related risks for investment portfolios. The Bank’s first disclosures on climate-related risks and opportunities provide transparency on the greenhouse gas emissions associated with managing its own reserves. These disclosures mark the start of an annual reporting cycle which will help to further the Bank’s internal efforts on climate change and inform external stakeholders.

In line with the disclosure pillar of the SRI Charter, the Bank wishes to ensure transparency through the provision of adequate information to the public on the impact of climate-related risks on its portfolios and the management thereof. The disclosed metrics include emissions the Bank has financed as an asset owner, i.e. the so-called “financed emissions” share of its Scope 3 emissions. The disclosure methodology is based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), established by the Financial Stability Board. The uniform approach used was developed jointly by the national central banks of the Eurosystem and the European Central Bank and is particularly beneficial for the calculation of climate-related metrics.