Many Paris Agreement signatories do not use ESG screens
Most reserve managers fail to take environmental factors into account for FX portfolios
More than three-quarters of central banks do not screen their assets based on environmental, social and governance (ESG) criteria – including many from jurisdictions that have signed up to the Paris Climate Agreement.
Reflecting the relatively nascent stage of ESG investing for many institutions, no central bank reserve managers responding to the benchmarking survey from Africa and the Americas use ESG screens. Central banks from emerging or developing market economies were also among the least
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More on Reserves
Fewer central banks added new reserve assets in 2023
Overall, 10.3% of institutions diversified their asset allocation, down from 18.6% last year
Wallstreet and others rank highest for reserves technology services
Ion’s Wallstreet treasury system tops the 2023 rankings
Reserve managers rank JP Morgan top for custody and banking
BlackRock preferred for knowledge transfer and capacity building
Reserve managers vote BlackRock as overall best asset manager
Goldman Sachs and “other” asset management firms also score highly
High income countries less likely to tranche reserves
Overall, 72.4% of central banks divide their portfolios into liquidity and investment sections
Fewer than half of reserve managers perform liquidity stress tests
Approach tends to be more common among African and American institutions
FX reserves commonly invested in US Treasuries, bank deposits
SIBs and EU NextGeneration fund trail behind, as reserve managers avoid infrastructure and crypto
Few central banks expanded existing swap lines over the past year
Nearly one-third of new and existing lines are denominated in US dollars