Latvijas Banka Publishes Its Climate-Related Financial Disclosures Report

Latvijas Banka has released its 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 2025 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 by adjusting the Natural Capital and Pollution and Waste Theme factors in its portfolio guidelines.

- Enhanced Climate Metrics: Disclosures expanded to include Scope 3 relative greenhouse gas (GHG) emissions data for non-sovereign issuers, 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 75% reduction in its carbon footprint since the implementation of its sustainability strategy in 2022, demonstrating the effectiveness of Latvijas Banka's decarbonisation efforts.

- Commitment to Collaboration and EU's climate neutrality objectives: Latvijas Banka continues to support the Eurosystem's climate policy and strives to ensure that the non-monetary policy portfolios under its management are aligned with a pathway that supports the goals of the Paris Agreement and the EU's climate neutrality objectives. The Bank 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: "The financial sector's role in the green transition extends beyond avoiding harm – it should support the reallocation of capital towards sustainable outcomes. Latvijas Banka continues to strengthen the analytical foundations that can make such reallocation more meaningful. Four years into our climate disclosure journey, we are encouraged by the progress made – a significant reduction in the carbon footprint of our equity portfolio, an improved ESG profile across our fixed income holdings, and a steadily expanding disclosure framework. Yet we recognise that transparency alone is not sufficient. What ultimately matters is whether our investment choices are helping to channel resources towards a more resilient, low-carbon economy – and on that question, much work remains. We are committed to continuing this effort honestly and openly." 

The full report is available on Latvijas Banka's website: https://www.bank.lv/en/news-and-events/other-publications/climate-related-disclosures-of-latvijas-banka-s-non-monetary-policy-portfolios.