Biodiversity and ecosystem services underpin all economic activities and human well-being, yet biodiversity is being destroyed at an unprecedented rate, posing significant risks to the economy and financial sector. Biodiversity-related financial risks, dependencies and impacts remain systematically mispriced by the financial sector, leading to its exposure to financial-related risks. Central banks and supervisors need to better understand, assess and manage biodiversity-related financial risks, with respect to central bank operations, collateral frameworks, financial stability and banking supervision.
The Project will develop a supervisory framework to help the Hungarian central bank (MNB) and other central banks assess biodiversity-related financial risks in the financial system, including transmission channels for physical and transition risks. The Project will aim to help MNB and banks with retail activities in Hungary become more informed about their exposures, impacts and dependencies to biodiversity-related financial risks, to improve management of such risks.
The Project will be undertaken two phases:
The organisational set-up of this 22-month project ensures coordination and cooperation between the DG REFORM, the MNB and the OECD. On the OECD side, the project is being jointly undertaken by the OECD Committee on Financial Markets (CMF) and the Working Party on Biodiversity, Water and Ecosystems (WPBWE) and Working Party on Climate, Investment and Development (WPCID) of the Environment Policy Committee (EPOC).
Central bank of Hungary , Magyar Nemzeti Bank (MNB)
The Organisation for Economic Co-operation and Development (OECD) is an international organisation that works to build better policies for better lives. The goal of the OECD is to shape policies that foster prosperity, equality, opportunity and well-being for all. We draw on 60 years of experience and insights to better prepare the world of tomorrow. Together with governments, policy makers and citizens, the OECD works on establishing evidence-based international standards and finding solutions to a range of social, economic and environmental challenges. From improving economic performance and creating jobs to fostering strong education and fighting international tax evasion, the OECD provides a unique forum and knowledge hub for data and analysis, exchange of experiences, best-practice sharing, and advice on public policies and international standard-setting.
The Directorate-General for Structural Reform Support (DG REFORM) helps EU countries to design and implement reforms as part of their efforts to support job creation and sustainable growth. DG REFORM coordinates and provides tailor-made technical support to EU Member States, in cooperation with the relevant Commission services. The support is primarily provided through the Technical Support Instrument (TSI). The goal is to support Member States’ efforts to design and implement resilience-enhancing reforms, thereby contributing to the EU’s recovery from the COVID-19 crisis, improving the quality of public services and getting back on the path of sustainable and inclusive growth.