Foreword

We live in a period of defining changes with greater impact than ever before. One of the clearest manifestations of this is the change in environmental and climatic conditions and its consequences on ecological, social, and economic processes.

As one of the world’s leading green central banks, the Magyar Nemzeti Bank is at the forefront of promoting environmental sustainability. Our conviction and commitment in this regard have been strengthened by the introduction of a green mandate in the Act on the Central Bank in the summer of 2021. Since then, the Magyar Nemzeti Bank - without compromising its primary mandate – has been focussing increasingly on the environmental and sustainability aspects of its activities. It has become clear that there is no time to waste, now is the time to lay the foundations for our future, to take decisive and innovative steps towards a green and sustainable economic and financial transformation.

There may be unique recipes and different solutions for a green transition, but it is beyond dispute that green transformation will not happen without measurement. Measurable and verifiable data are essential for building strategies, setting targets, and evaluating actions. For an accelerated green economic transition, green central banks, green regulators, green loans, and above all green transparency will be required. Creating green transparency in the financial system is one of the cornerstones of the challenges of the green transition.

It is with this goal in mind that the Magyar Nemzeti Bank has prepared its Climate-related Financial Disclosure, joining the world’s leading central banks in the fight against climate change. The publication, which is based on international recommendations and best practices, provides a factual account of the internal operations and corporate governance of the central bank in the light of climate challenges and the resulting responsibilities. Furthermore, it provides a glimpse into the climate and other environmental impacts of the various financial instruments on the central bank’s balance sheet.

In addition to presenting the Magyar Nemzeti Bank’s exposures to climate-related risks, our declared aim is to set an example for local economic actors – both in the private and public sectors – by publishing the Climate-related Financial Disclosure. The financial sector is a priority for the central bank, and although climate change impacts have started to be considered, current practices still show significant room for improvement. The central bank intends to use this report, among others, to provide guidance to financial sector actors to monitor their own carbon footprints.

Preparing a climate-related financial disclosure is a new task for central banks, but the Magyar Nemzeti Bank’s disclosure clearly demonstrates that with active engagement, the challenge can be overcome. Everyone must actively contribute to achieving a sustainable economic transition. This requires objective assessment and quantification – measuring and evaluating risks and exposures to draw conclusions.

I invite you to read the Magyar Nemzeti Bank’s Climate-Related Financial Disclosure with the above in mind.

Dr György Matolcsy Governor of the Magyar Nemzeti Bank