Winning Hearts and Minds-How Central Banks went green

The author analyzes the emergence of the climate-related financial risks (CRFR) policy norm in central banking, highlighting the steps taken by an epistemic community of think tanks and academics, as well as activist campaigns, to promote its adoption.

Format: Paperback / softback
Length: 65 pages
Publication date: 02 January 2023
Publisher: Springer-Verlag Berlin and Heidelberg GmbH & Co. KG

The author delves into the intriguing phenomenon of climate-related financial risks (CRFR) emerging as a policy norm in central banking. In recent years, Central Banks (CBs) have shown a growing interest in addressing climate change, a development that has garnered surprisingly limited scholarly attention. This study seeks to understand why CBs with a narrow mandate, such as the European Central Bank (ECB), have ventured into this realm. What factors drive CBs to adopt a new policy norm on climate change and sustainable development, despite the potential debates about their independence?

To answer these questions, the author conducted extensive research using data collected through expert interviews, which were triangulated with public sources. The findings reveal that the CRFR policy norm emerged through a three-step process. Firstly, an epistemic community of think tanks and politically engaged academics framed the concept of CRFR and proposed a specific policy norm tailored for CBs. Secondly, the epistemic community imparted the knowledge of the CRFR policy norm to early-adopting CBs, who played a crucial role in championing it within the central banking community. Thirdly, activist campaigns have further strengthened the CRFR policy norm by pressuring CBs to adhere to the emerging new policy standard.

This study contributes to our understanding of CBs' role in addressing climate change and sustainable development. It sheds light on the factors that drive CBs to embrace this responsibility and the mechanisms through which the policy norm has gained social recognition and traction. The findings have important implications for policymakers, central bankers, and scholars interested in the intersection of finance, climate change, and governance.

In conclusion, this book provides valuable insights into the emergence of the CRFR policy norm in central banking. It highlights the complexities and challenges associated with CBs' involvement in climate-related issues and sheds light on the strategies employed by CBs to navigate this evolving policy landscape. By examining the factors that drive CBs' adoption of the CRFR policy norm, this study contributes to the ongoing discourse on the role of central banks in promoting sustainable development and addressing climate change.

Weight: 117g
Dimension: 210 x 148 (mm)
ISBN-13: 9783658402419
Edition number: 1st ed. 2023