RBI joins Network for Greening the Financial System- NGFS
The Reserve Bank of India recently joined the Network for Greening the Financial System (NGFS). By joining the system, RBI is to learn from and contribute to the Global Climate risk management in the financial sector. Ultimately, the apex bank will work with its global partners to support the transition towards a sustainable economy.
Greening the Financial System
- There are 83 central banks associated with the system. Of these 75 are members and 13 are observers.
- The main objective of the system is to increase and accelerate green finance.
- It was announced during the One Planet Summit held at Paris in 2017.
- The initiative was launched by eight central banks under the leadership of Banque de France.
- It aims to help the members design policies and climate risk resilience in financial sector.
Current Functions of NGFS
The NGFS is currently working under the following:
- Microprudential or Supervision: Done by Singapore
- Macrofinacial works: By Bank of England
- Scaling up the Green Finance: by Deutsche Bundesbank (Germany)
- Bridging the data gaps: International Monetary Fund
- Research: China
- According to the Global Risks Report, 2021 of the World Economic Forum, the infectious diseases and climate action failure are considered as the highest risks.
- According to World Economic Forum, around 5 trillion USD is needed to be invested annually in green infrastructure. Currently the world is investing only 100 billion USD annually.
- According to World Bank, the loses to GDP of India due to Climate Change will be 1,178 billion USD by 2050.