WHAT CHALLENGES DO CENTRAL BANKS FACE TO IMPLEMENT ENVIRONMENTAL, SOCIAL, AND GOVERNANCE INVESTING?
Central bank reserves have collectively grown to over $14 trillion, yet only one in six central banks considers social, governance, and environmental (ESG) factors in their investments. Our team set out to answer why reserve managers incorporate ESG into their portfolios. We published our findings in a primer on ESG for reserve managers to respond to central banks’ growing demand for knowledge on ESG in their investments. The practice of incorporating ESG factors into investment decisions has developed over the past 60 years for equity investors, but only recently has it gained ground among fixed-income investors.