Abstract
Central banks have begun to examine and manage climate risks, including both transition risks of moving from fossil fuels to clean energy and physical climate risks. Here we provide a systematic assessment of how and why central banks address climate risks on the basis of an original dataset of central banks across the Organization for Economic Co-operation and Development and Group of 20. We show that central banks vary substantially in the extent to which they re-risk fossil fuel investments and physical risks and de-risk clean energy investments. Our analysis finds that central bank climate risk management is not associated with a country’s economic exposure to transition risks, but instead with its climate politics. The results suggest that central banks may not be solely independent risk managers but also actors that respond to political demands. As such, central banks may reinforce national decarbonization policy, while not correcting for the lack thereof.
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Data availability
We created two datasets for this analysis. The first is a policy-specific dataset that includes the individual re-risking and de-risking policy measures for all central banks in our dataset. The second is a country-level dataset that aggregates the policy observations into aggregate re-risking and de-risking scores. This dataset also includes the independent variables for our regression analysis. Both datasets are described in Methods and in Extended Data Tables 1 and 2. We currently do not make the datasets publicly available owing to additional ongoing analysis by the authors, but we make them available upon reasonable request.
Code availability
We will provide the code for the regression analysis upon request.
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Acknowledgements
We are grateful for feedback from R.O. Keohane and members of the Energy and Environment Policy Lab at the University of California, Berkeley. J.M. acknowledges funding from the Climate Program of the Berkeley Economy and Society Initiative and the USDA National Institute of Food and Agriculture, Hatch Project (accession no. 1020688).
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E.S. conceived the study and led the development of theory and corresponding analysis, with the guidance of J.M. and J.J.F; E.S. collected the data, designed the methodology, executed the statistical analysis and produced tables and figures, with the guidance of J.M. and J.J.F.; and E.S. and J.M. wrote the paper.
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Shears, E., Meckling, J. & Finnegan, J.J. How central banks manage climate and energy transition risks. Nat Energy 10, 470–478 (2025). https://doi.org/10.1038/s41560-025-01724-w
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DOI: https://doi.org/10.1038/s41560-025-01724-w
