THE ROLE OF CENTRAL BANKS IN SUSTAINABLE DEVELOPMENT ANDESG TRANSFORMATION

This article is about the potential role of Central Banks in ESG (Environmental, Social, and Governance) transformations. Sustainable development means a balanced approach to environmental, social and economic development, which is more responsible for meeting the needs of both current and future generations. This approach has led to the need for ESG-transactions, which initially arose as a necessary response to the challenges of climate change. Later, it already became a hot topic in financial markets. Naturally, Central Banks could not remain uninvolved. Central banks, traditionally focused on financial stability and inflation, are increasingly acknowledging their role in promoting environmental sustainability. Their unique position allows them to influence the economy in ways that can support the global green transition. Central banks can shape financial behaviors and market conditions to either support or hinder the transition to a sustainable, low-carbon economy. Furthermore, they are now exploring climate-related stress testing, integrating ESG risks into regulatory frameworks, and supporting green bond markets. These initiatives not only help build resilient financial systems but also align monetary policy tools with broader sustainability goals. As such, central banks are becoming active agents in global climate policy.