How central banks manage climate and energy transition risks

In this article, we provide a systematic assessment of how and why central banks address climate risks on the basis of an original dataset of central banks across the Organization for Economic Co-operation and Development and Group of 20. We show that central banks vary substantially in the extent to which they re-risk fossil fuel investments and physical risks and de-risk clean energy investments. Our analysis finds that central bank climate risk management is not associated with a country’s economic exposure to transition risks, but instead with its climate politics.