Bank of Latvia Reports Progress on Climate Risk Management, Eyes Further Action
The Bank of Latvia's 2025 review highlights progress in climate risk management, including a 75% reduction in the carbon footprint of its equity portfolio, but acknowledges the need for more decisive action to redirect resources toward a low-carbon economy.
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The Bank of Latvia has published its 2025 review, detailing advancements in climate risk management and the integration of sustainability principles into its operations. The Bank recognizes that transparency alone is insufficient – the key question is whether investment decisions effectively channel resources toward a more resilient, low-carbon economy. Much work remains in this area.
The review emphasizes broader integration of sustainability strategies into investment decision-making. The Bank updated its developed market equity portfolio strategy and incorporated natural resource, pollution, and waste factors into portfolio guidelines. Climate indicators have been improved: the financial information report now includes relative scope 3 greenhouse gas emission data for non-government issuers.
Since the implementation of the sustainability strategy in 2022, the carbon footprint of the developed market equity portfolio has decreased by 75%. The Bank continues to support the Eurosystem's climate policy and ensures its non-monetary policy portfolios align with the action plan supporting the Paris Agreement and EU climate neutrality goals. The Bank actively participates in the Network for Greening the Financial System (NGFS) and contributes to developing best practices in sustainable finance.
