The Croatian National Bank (HB) said it would develop and implement its own climate strategy, include climate and environmental risks in its supervisory expectations, and encourage credit institutions to include those risks in their risk management and decision making.
In order to alleviate climate change and achieve climate transition, it is necessary to urgently coordinate the activity of all private and public stakeholders and institutions as well as the international community, it added.
The financial sector will have a key role in financing significant investment in sustainable infrastructure and technologies needed for a sustainable economy resilient to climate change, the HNB said.
Climate and environmental risks will be included in supervisory expectations in line with European Central Bank guidelines, the HNB said, adding that by the end of 2022 it will draw up an action plan to reduce its carbon footprint.
Croatia is hoping to enter the eurozone in 2023 and HNB is converging its policies with the ECB.
“Green transition requires a carbon price that fully reflects current and future environmental and social costs. We are still far from that. Moreover, fossil fuels received $450 billion direct support in 2020. Significant increases in energy prices can affect the most vulnerable in society, so care should be taken to ensure that the transition is fair, i.e. that the benefits are fairly shared”, wrote ECB President Christine Lagarde, in an editorial in daily Jutarnji list, Euractiv.com partner.
The ECB boss added that the impact of natural disasters and the green transition on inflation directly affects the ECB’s main task of maintaining price stability.
“The short-term costs of a green transition are significantly less than the long-term benefits of avoiding costly disasters such as forest fires, heatwaves and droughts”, concluded Lagarde.
(Željko Trkanjec | EURACTIV.hr)