Latvijas Banka has released its third annual report on Climate-Related Disclosures for its non-monetary policy portfolios, reaffirming its commitment to transparency, sustainability, and the integration of climate considerations into its investment practices.
The report, which covers the 2024 calendar year, is prepared in line with the Eurosystem's common stance on climate-related disclosures and the recommendations of the Task Force on Climate-Related Financial Disclosures. It offers a comprehensive overview of Latvijas Banka's progress in managing climate-related risks across its investment portfolios. It reflects Latvijas Banka's continued efforts to align its investment strategies with the objectives of the Paris Agreement and the European Union's climate neutrality goals.
Key developments highlighted in the 2025 report include:
- Expansion of Sustainability Integration: Latvijas Banka has further embedded its Sustainability Strategy into its investment decision-making, with updates to the developed markets equity portfolio and the application of environmental, social, and governance (ESG) criteria to the emerging markets fixed income portfolio and global investment grade fixed income portfolio.
- Enhanced Climate Metrics: For the first time, the report includes Scope 3 greenhouse gas (GHG) emissions data, providing a more comprehensive view of the carbon footprint of Latvijas Banka's investments. Latvijas Banka also reports updated metrics for previous years as more accurate data becomes available.
- Significant Reductions in Carbon Footprint: The developed markets equity portfolio has achieved a 73% reduction in its carbon footprint since the implementation of its sustainability strategy in 2022, demonstrating the effectiveness of Latvijas Banka's decarbonisation efforts.
- Improved ESG Score: The ESG score of the emerging markets fixed income portfolio increased by 11% following the adoption of a new benchmark in 2024, and reflecting a reallocation toward issuers with stronger ESG ratings.
- Commitment to Transparency and Collaboration: Latvijas Banka continues to support the Eurosystem's climate policy and actively participates in the Network for Greening the Financial System , contributing to the development of best practices in sustainable finance.
Mārtiņš Kazāks, Governor of Latvijas Banka, commented: "Climate change is not a distant threat – it is a present-day challenge that demands urgent and coordinated action. At Latvijas Banka, we are committed to doing our part by integrating sustainability into our investment decisions and by promoting transparency. The transition to a low-carbon economy will reshape industries and societies, and we must ensure that finance plays a constructive role in this transformation. Our children will live with the consequences of our choices today, and we must act responsibly and decisively."