Logical structure of the sustainability idea
In the future context, sustainability is a paradigm, in which environmental, social and economic considerations are balanced in the pursuit of an improved quality of life. A sustainable approach respects the planet's ecological boundaries and directs economic development towards equal opportunities and quality of life of everyone in society.
This objective can be achieved through an extended sustainable transformation process, which in turn involves a wide range of macroeconomic risks the identification and management of which are crucial both with regard to macroeconomic stability and sound financial system having a direct effect on the attainment of each central bank's targets. This process has a direct and substantial impact on successful performance of Latvijas Banka's tasks, such as the implementation of the monetary policy, provision of financial stability, management of foreign reserves, as well as on other functions of Latvijas Banka.
The Sustainability Strategy of Latvijas Banka defines the link between the sustainable transformation process and the central bank's tasks and the implications this process has on these tasks, describes the international framework of our operation and identifies the key areas where we implement a sustainable policy.
Sustainability issues are also well established in the Eurosystem's activities. A roadmap has been adopted under the new monetary policy strategy. It sets out measures to limit risks related to climate change.
The results of the UN Climate Change Conference (COP26) held in Glasgow on 31 October–13 November 2021 show that sustainability objectives feature not only on the agenda of certain countries and regions but they also feed through into global cooperation, which is deeper than the attainment of the goals set out in the Paris Agreement, and major international businesses willingly engage in this cooperation. The speed and pace at which changes take place highlight the need to foster understanding and readiness of the Latvian financial sector to be part of the process of sustainable changes. Financial sector supervision will provide a vital fillip to a sustainable transformation process of the economy. Latvijas Banka cooperates with the FCMC in developing a common understanding and approach to adapting financial sector supervision to the attainment of sustainability objectives.
Sustainable transformation is a global process, and Latvijas Banka, within the scope of its mandate, plays an active role in it. Latvijas Banka is a member of the Network for Greening the Financial System (NGFS) since 2020. The climate change scenarios and guidelines developed by the NGFS for the introduction of sustainability elements into the financial sector are important for ensuring common and coherent sustainable transformation of the global financial system. Participation of Latvijas Banka in NGFS working groups not only contributes to the global processes but also facilitates international networking, enriches employees' level of professional know-how and provides in-depth understanding of methodologies which, in turn, enables Latvijas Banka to make the most of its tasks to implement monetary policy, ensuring financial stability, managing foreign reserves and other financial investment, as well as performing other functions of Latvijas Banka.
The Green Group is Latvijas Banka's centre for sustainable thought. The Group is comprised of 20 experts representing several departments of Latvijas Banka. Through a dialogue with experts, researchers and sectoral associations, Latvijas Banka improves its understanding of the effects of sustainable changes on economic processes of public interest and integrates this knowledge successfully into analytical work of Latvijas Banka. Members of the Green Group share their knowledge with other colleagues during its seminars. The analysis on sustainability issues carried out by Latvijas Banka's specialists is reflected in a series of publications.
Edvards Kušners. The fastest headless chicken;
Daina Paula, Andrejs Semjonovs. Energy efficiency in buildings: a beneficial and green solution to withstand the ravages of time and unwise energy consumption;
Daina Paula, Andrejs Semjonovs. Energy efficiency in buildings;
Jānis Strazdiņš, Kristīne Petrovska. Exposure of Latvia's securities portfolio to climate risks;
Krista Kalnbērziņa, Ludmila Fadejeva. Inequality is not a problem faced by one part of society only;
Krista Kalnbērziņa, Ludmila Fadejeva. Where is the unused human capital or inequality in Latvia;
Daina Paula. Strengthening the Green Deal in Latvia: what benefits can electromobility offer?
Daina Paula. In pursuit of energy efficiency: should an apple-tree be planted just because of its low-bending branches?
Latvijas Banka feels there is a considerable growth in demand for its contribution in the field of sustainability, and it has strengthened its role as an opinion leader and is the most influential authority in Latvia with regard to the issues of the analysis of economic processes and development forecasts in Latvia and the euro area (Survey of economic experts. Latvijas Fakti, 2021). The green economy and European Green Deal were identified by the overwhelming majority of respondents to the survey as the most topical issues requiring analysis and opinion by Latvijas Banka.
Teleworking introduced during the Covid-19 pandemic has certainly reduced Latvijas Banka's carbon footprint, but it has limited the possibilities for the introduction of new sustainable practices in work organisation. However, the commenced reforms continued in 2021, e.g. the reduction of the number of vehicles. At the end of 2021, Latvijas Banka owned just one passenger vehicle, which was not an operational vehicle engaged in transportation of cash. This made it possible to reduce the ecological footprint and save on the use of public resources.
To highlight the aspect of quality of life in achieving sustainability, Latvijas Banka organised a discussion "Forest for Your Soul" at the LAMPA Conver- sation Festival. The international conference "Sustainable Economy in Times of Change" organised by Latvijas Banka analysed several sustainability-related issues.
In 2021, Latvijas Banka engaged in active communication with the financial sector, raising and developing awareness of management and monitoring of climate risks in the financial sector, raising public and business awareness of sustainability and sustainable finance (see the section Financial Stability).