KRISTALINA GEORGIEVA, THE MANAGING DIRECTOR OF THE INTERNATIONAL MONETARY FUND/BLOOMBERG
The International Monetary Fund’s (IMF) new Managing Director, put climate change high up on the agenda at this year’s annual meetings, saying the fund is getting ready to incorporate environmental risk into its economic analysis, reported Bloomberg.
Kristalina Georgieva, the IMF Managing Director, said, “The IMF is gearing up very rapidly to integrate climate risks in our surveillance work.”
“When we are working in countries that are either big emitters of carbon and therefore need transition or are at high risk of carbon shocks, there is no way to address the fundamentals of their economies without looking at these climate risks,” said Georgieva.
The Washington-based fund is already incorporating environmental factors into its analysis of higher-risk countries and would like to make it routine, Georgieva said. The managing director’s comments come as a global political movement against global warming is gaining steam.
Central banks have increasingly entered the debate, particularly through their membership of the NGFS, which promotes sustainable growth. As part of its work for the group, the Bundesbank will publish a handbook on the role of monetary authorities in fostering the greening of financial markets at the meetings this week.
An IMF report published last week called climate change a crisis that requires immediate action from all levels of government.
The network seeks to strengthen to enhance the role of the financial system to manage risks as well as mobilise capital for green and low-carbon investments in the broader context of environmentally sustainable development.
Asked whether central banks are ready to tackle climate-related challenges, Georgieva said that most agree on the need for disclosure and stress testing for environmental risks. How much central banks can actually use their tools to foster green investments and whether disclosure should be mandatory are more controversial areas, she said.