Latvijas Banka, the central bank of Latvia, has released its second Climate-Related Disclosures Report, shedding light on its initiatives to foster sustainable development and address environmental, social, and governance (ESG) issues.
The report, which covers the 2023 calendar year, underscores Latvijas Banka's continued commitment to transparency and accountability in relation to sustainability. It provides insights into the bank’s governance, strategy, risk management practices, and its approach to managing climate-related risks within non-monetary policy portfolios.
"The release of this second disclosures report underlines Latvijas Banka's dedication to sustainability, transparency, and sound governance,"
said Mārtiņš Kazāks, Governor of Latvijas Banka.
"This report reflects our ongoing efforts to provide the public with a clear and comprehensive understanding of our activities."
The report reveals that Latvijas Banka has made steady progress in reducing its carbon footprint within its developed markets equity portfolio. In 2023, the carbon footprint decreased by an additional 22% compared to 2022 data, resulting in a total reduction of 59% since the implementation of the sustainability strategy.
The report also discloses that due to a change in the benchmark index of the emerging market fixed income portfolio, the ESG score of the portfolio improved by 13%, from 46 at the end of March 2024 to 52 at the end of April 2024.
"Latvijas Banka is committed to contributing to global efforts to address challenges such as climate change, biodiversity conservation, and inequality,"
said Mārtiņš Kazāks.
"We recognize that by addressing climate-related and broader sustainability challenges, we can create long-term value for our society, contribute to a more sustainable future, and inspire the entire Latvian financial sector to follow suit."
Latvijas Banka’s disclosures are part of a concerted effort by all Eurosystem’s central banks to publish climate-related financial disclosures on their euro-denominated non-monetary policy portfolios. This is done using a common framework that sets minimum reporting requirements based on the recommendations of the Task Force on Climate-related Financial Disclosures.