Inclusive Green Finance: a New Agenda for Central Banks and Financial Supervisors

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This policy brief was published by INSPIRE (The International Network for Sustainable Financial Policy Insights, Research and Exchanges), as part of the Sustainable Central Banking Toolbox paper series.

Climate change and environmental degradation can have profound economic impacts, which may translate into micro- and macro-financial risks that need to be addressed by central banks and financial supervisors. Green finance and financial inclusion have mostly been treated by central banks and financial supervisors as two distinct and largely unrelated agendas, despite meaningful overlaps between these two areas. Key target groups for financial inclusion tend to be disproportionately exposed to the impacts of climate change and environmental degradation, while also playing an important role in adapting to and mitigating environmental change.

Against this backdrop, central banks and financial supervisors can combine green finance and financial inclusion policies in an integrated inclusive green finance (IGF) approach. By accounting for equity concerns in the design of green policies, this policy approach can avoid any potential adverse effects on economically vulnerable groups, and enable central banks and financial supervisors to foster a just transition to an environmentally sustainable economy.

Read the full policy brief: Inclusive Green Finance: a New Agenda for Central Banks and Financial Supervisors.