Climate-related risks are increasing due to the lack of a coordinated global response by governments to combat climate change and restrict temperature increases to 1.5 degrees Celsius.

Countries are undergoing green transitions at different paces, exacerbating the risks associated with a disorderly global transition. Climate change poses significant economic and social risks. In this context, central banks face higher risks to financial and price stability. There is more urgency to increase the resilience of financial systems to climate-related shocks and ensure strong monetary policy credibility to address larger and more persistent price shocks.

While the primary tools for adaptation to, and mitigation actions against, climate change are vested with government departments, the South African Reserve Bank (SARB) has the important role of maintaining price and financial stability in the face of rising climate-related risks.

The SARB is focused on:

• ensuring that financial institutions and markets consider climate-related risks in their operations; 
• understanding the impacts of climate change on inflation and financial stability and taking appropriate actions to mitigate against these risks; and
• greening its own operations. 

The SARB’s climate change workstreams are coordinated by a steering committee and managed by different departments in the central bank.

International cooperation

The SARB’s climate strategy and work programme is guided by the recommendations of the Network for Greening of the Financial System (NGFS), as informed by the Financial Stability Board and the Group of Twenty. In January 2024, Deputy Governor Fundi Tshazibana was announced as the Vice Chair of the NGFS for a period of twoyears. Locally, the SARB closely coordinates its work with National Treasury and regulators through the Intergovernmental Sustainable Finance Group.