UCL Institute for Innovation and Public Purpose


Central banks, financial supervision and the green transition

Greening monetary policy and financial regulation to accelerate a shift of financial flows in support of the ecological transition

About the project

In the face of accelerating environmental breakdown, financial flows must urgently realign away from ecologically damaging and towards sustainable activities. This project aims to accelerate this shift by influencing monetary policies and financial regulations undertaken by central banks, financial supervisors, and other relevant policymakers. Our research has built the case for policy interventions to be taken on a precautionary basis. This is justified by both the radical uncertainty of climate change and biodiversity loss and the catastrophic consequences of policy inaction. We have identified certain green financial policies as sensitive intervention points that have the potential to catalyse a green transition in the real economy, as well as avoid the emergence of ecological tipping points. 

Over the course of this project, which was initiated in 2018, sustainability goals have steadily been moved up the agendas of financial policymakers, and IIPP research has had significant impact contributing to this progress. The ‘precautionary financial policy’ approach has been referenced in policy documents by the White House, the Network for Greening the Financial System (NGFS) and the Canadian Senate as well as individual central bank research. Our work on nature-related financial risks was also cited in the influential Dasgupta Review on the Economics of Biodiversity, and our researchers contributed substantially to a study group launched jointly by the NGFS and the INSPIRE research network on ‘Biodiversity and Financial Stability’. We continue to collaborate with a number of individual central banks, as well as working in close partnership with other universities, foundations, think tanks, and NGOs on this agenda.  

Academic papers
  • Chenet, H., Ryan-Collins, J., Lerven, F. van, (2021). Finance, climate-change and radical uncertainty: Towards a precautionary approach to financial policy. Ecological Economics 183, 106957. https://doi.org/10.1016/j.ecolecon.2021.106957 
Book chapters
  • Kedward, K. and Ryan-Collins, J. (2022). A Green New Deal: Opportunities and Constraints, in: Arestis, P., Sawyer, M. (Eds.), Economic Policies for Sustainability and Resilience, International Papers in Political Economy. Palgrave Macmillan, Cham.   
Working papers
Policy briefs and reports
IIPP blogs
Media and events





Laudes Foundation