Speeches in the Green: The Political Discourse of Green Central Banking

In this paper, we employ a keyword-assisted topic model to quantify the extent of climate-related
communication of central banks. We find evidence for a significant increase in climate-related speeches
by central banks, which address the topic mostly in parallel with topics on financial stability, payment
innovations, and the banking sector. Price stability concerns play a minor role. Finally, we examine factors
that can explain the extent of green communication by central banks. Controlling for macroeconomic and
climate-related variables, we identify two external factors that can prompt central banks to prioritize
climate research on their agenda: First, peer pressure, measured by membership of a working group on
green financing, increases green communication. Second, a high degree of governmental climate
engagement, reflected by the extent of national climate laws, is positively related to green communication
by central banks. Whether the central bank has an implicit or explicit sustainability mandate, however,
does not explain the extent of green communication.