Monetary Policy, Financial Regulation, and Supervision
Strengthening regulatory frameworks and aligning monetary policy operations with climate goals are essential to ensuring financial stability and facilitating green investments.
2030 Goals
- Monetary policy frameworks fully account for climate risks and contribute to an orderly transition towards a net-zero economy, including through credit operations, asset purchases, and collateral policies.
- Financial regulation and supervision incorporates robust safeguards against physical and transition climate risks, and contributes to a net-zero and nature-positive financial system. This includes enabling treatment of assets (such as long-term infrastructure) and financing mechanisms (such as blended finance) that contribute to the transition.
StatusNo progress
No progress
- The NGFS reports that member central banks have conducted pilot programs to protect their own balance sheets and contribute to the transition through monetary policy operations.
- The FSB reports that progress has been made across all four blocks of its Roadmap for Addressing Climate-related Financial Risks (disclosures, data, vulnerabilities analysis, and regulatory and supervisory practices and tools).
- On the other hand, WWF reports that key gaps remain in regulatory/supervisory progress and that only 8 out of 45 central banks surveyed have made significant progress in accounting for climate risks in monetary policy operations.
- In particular, the regulatory treatment of climate-related assets should be reviewed to ensure institutions do not face unnecessary restrictions on financing climate investments, without compromising safety & soundness or financial stability.
- The IMF has issued new guidance for G20 countries, recommending that climate-related financial risks be included in monetary policy frameworks to enhance financial stability and facilitate green investments.
Relevant Actors & Audiences
Private FIs
Glasgow Financial Alliance for Net Zero (GFANZ)
International Organizations
International Monetary Fund, Financial Stability Board
Governments
Ministries of Finance, Central Banks, Financial regulators
Leading Countries and Alliances
G20 Ministries of Finance
Supportive Stakeholders
World Wildlife Fund, Sustainable Finance Lab, International Sustainability Standards Board, International Financial Reporting Standards
Milestones
The below events all contain milestones related to Monetary Policy, Financial Regulation, and Supervision.
April
WBG/IMF Spring Meetings 2025
Milestones
Monetary Policy, Financial Regulation, and Supervision
At least 5 central banks announce frameworks for adjusting monetary policy tools to better account for climate risks.
October
G20 Finance Ministers and Central Bank Governors Meeting Oct 2025
Milestones
Monetary Policy, Financial Regulation, and Supervision
Commitments from leading central banks to expand climate stress testing and enhance monetary policy alignment with climate goals.
Resources
The below resources all pertain to the topic of Monetary Policy, Financial Regulation, and Supervision.
WWF SUSREG Tracker
Private Finance, Monetary Policy, Financial Regulation, and Supervision
FSB Roadmap
Private Finance, Monetary Policy, Financial Regulation, and Supervision
Network for Greening the Financial System
Private Finance, Monetary Policy, Financial Regulation, and Supervision