Unpacking climate-related financial risks: the central bank-finance nexus in climate risk disclosure (working title)

Keywords: nature-related financial risks, global climate governance, green central banking
Session Type: Virtual Paper Abstract
Day: Tuesday
Session Start / End Time: 3/1/2022 11:20 AM (Eastern Time (US & Canada)) - 3/1/2022 12:40 PM (Eastern Time (US & Canada))
Room: Virtual 1

Abstract

Global climate governance has become an increasingly prominent arena where central bank-financial market cooperation can be observed; most specifically, in the identification, assessment, and mitigation of nature- and climate-related financial risks (NRFR). Climate risk disclosure has come to the fore as a policy solution among central banks and financial markets. Both the newly founded central bank forum, the Network for Greening the Financial System (NGFS) as well as two notable hybrid climate governance initiatives, i.e. the Taskforce on Nature-related Financial Disclosures (TNFD) and the Task Force on Climate-related Financial Disclosures (TCFD) promote disclosure as a crucial and feasible measure in the identification and mitigation of NRFR. This contribution investigates the narrative surrounding disclosure as a viable climate-risk mitigation tool through the central bank-finance nexus. Specifically, it asks: How has disclosure emerged as a feasible climate change mitigation strategy within central banking? Guided by the insights within Cultural Political Economy and combined with a qualitative content analysis of publications by both taskforces and the NGFS from 2017-2021, I argue that central banks, through varying modes of selectivities towards reducing complexity, aim to consolidate climate risk disclosure through spatio-temporal fixes. Their active management in the identification and assessment of NRFR through financial markets thus contributes to a broader understanding of state-market entanglements.