BAKU, Azerbaijan, June 12. On June 12, Lietuvos Bankas released its 2024 Climate-Related Financial Disclosures for non-monetary policy portfolios, detailing its progress toward the European Union’s climate neutrality goals and its own transition to a low-carbon investment strategy, Trend reports with reference to the Bank of Lithuania (Lietuvos Bankas).
The central bank has committed to making all of its non-monetary policy-related financial assets climate neutral by 2050. As part of this long-term goal, interim climate targets have been established, including a reduction of the weighted average carbon intensity (WACI) of equity investments by 30 percent by the end of 2025. This reduction is measured against a 2020 baseline as well as against the carbon intensity of the market benchmark for developed countries.
According to Marius Ignotas, Director of the Market Operations Department at Lietuvos Bankas, the central bank has already seen notable improvements since implementing its sustainability strategy in 2022.
“After the sustainability strategy was introduced in 2022, the WACI indicator for Lietuvos Bankas’ equity investments has already fallen by 54 percent and improved by 29 percent compared to the benchmark. The possibility of setting interim targets for other asset classes is currently being considered,” said Ignotas.
The report aligns with the EU’s overarching climate objectives under the Paris Agreement, which aims for climate neutrality by 2050 and a reduction of greenhouse gas emissions by at least 55 percent by 2030, relative to 1990 levels.
Lietuvos Bankas’ investment policy for managing foreign reserve assets includes a focus on reducing climate-related risks, provided this does not conflict with core principles of security, liquidity, and return.
This climate disclosure is part of a coordinated effort across the Eurosystem—a group of central banks within the eurozone—to enhance transparency on how financial institutions manage climate-related risks and impacts. The disclosures follow the Task Force on Climate-Related Financial Disclosures (TCFD) framework and address four main areas: governance, strategy, risk management, and metrics and targets.
Critical metrics delineated in the analysis encompass the
weighted average carbon intensity, aggregate carbon emissions, and
overall carbon footprint, providing enhanced visibility into the
alignment of financial portfolios with overarching global climate
objectives.
The document elucidates the escalating influence of monetary
authorities in catalyzing sustainable financial mechanisms and
facilitating a systematic, transparent transition towards a
carbon-neutral economic paradigm.
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