UCL Institute for Innovation and Public Purpose


Central banks and sustainability

About the project

In the face of the global climate emergency, the project aims to achieve a significant shift in financial flows away from ecologically damaging towards environmentally sustainable activities via influencing central banks’ and financial supervisors’ monetary and regulatory policies. Specifically, the project will involve research, policy analysis and policy development focussed on: 

  • Aligning central banks’ financial risk frameworks used for both monetary policy operations and financial regulation with climate and other environmental risks to reduce unsustainable investment.
  • Achieving a shift in central bank policy frameworks to proactively use their balance sheets and steer credit towards sustainable activities.
  • Examining how central banks can better coordinate their policy interventions with other government departments, for example ministries of finance and industrial policy, to support a zero-net carbon transition and environmentally sustainable economy.  

IIPP is working in close collaboration with a number of foundations, universities, think tanks, NGOs and research institutes on this agenda as well as collaborating with individual central banks and supervisor authorities.  One forum the research particularly seeks to engage with is the recently established Network of Central Banks and Supervisors for Green the Financial System (NFGS).





Laudes Foundation



Further reading