Proof that public scrutiny can raise standards - from a top central banker

As he prepares to leave office, Banque de France Governor François Villeroy de Galhau was asked to share an achievement that he was proud of under his tenure. We are pleased to say that he referred to Positive Money, citing how France’s Central Bank has “been recognized by international NGOs, three times in a row, as the greenest central bank in the G20.”

The Banque de France ranked at the top of Positive Money’s Green Central Banking Scorecard three times under his leadership. For us, this is more than a passing reference, it’s a chance to celebrate. Because it proves that independent civil society analysis really can shape the debate at the highest levels of central banking.

Our latest 2024 Green Central Banking Scorecard assessed how well central banks are responding to the climate crisis across monetary policy, financial supervision and leadership. The Banque de France stood out for concrete actions, not just words.

Among other steps, it has supported the integration of climate risks into monetary policy operations, backed climate-adjusted collateral frameworks, and pushed for tilting asset purchases away from high-carbon sectors. It has been a strong advocate for climate stress testing of banks and insurers, and for embedding climate risk into day-to-day financial supervision. Internationally, it played a key role in launching and shaping the Network for Greening the Financial System (NGFS), helping to put climate risk firmly on the agenda of central banks worldwide.

These are precisely the kinds of policies that Positive Money has called for many years. We have consistently argued that central banks must stop reinforcing fossil fuel dependence through their operations, properly account for climate-related financial risks, and use the tools at their disposal to support a fast and orderly transition to a low-carbon economy.

When the Governor of the Banque de France cites our scorecard as part of his institution’s achievements, it sends a clear signal. It shows that our analysis is read, taken seriously, and used as a benchmark. It also shows that transparency and public scrutiny can raise standards across the system.

But the job is far from done.

Central banks around the world still hold high-carbon assets on their balance sheets. Many have yet to fully align their collateral frameworks and corporate bond purchases with climate goals. Climate stress tests need to translate into binding supervisory expectations and monetary policy strategies must better reflect the macroeconomic risks posed by climate breakdown and the transition.

Hundreds of billions of dollars are still flowing to fossil fuels, destroying lives and livelihoods around the world, it is the responsibility of our central banks to act. As leadership changes at the Banque de France and elsewhere – including at the European Central Bank itself – the direction of travel will matter. The progress of recent years must not stall. Instead, central banks should build on it – by phasing out support for fossil fuels, strengthening climate-related capital requirements where risks are high, and ensuring that their operations are fully aligned with the Paris Agreement.

François Villeroy de Galhau’s reference to our scorecard is a reminder that change is possible, and that outside pressure and people power works. We will continue to track, analyse and push for a financial system that supports a safe climate and a fair economy.