Central Bank of Cyprus publishes fourth climate disclosure showing lower portfolio carbon metrics and a higher allocation to green social and sustainable bonds

The Central Bank of Cyprus published its fourth climate-related financial disclosure for its non-monetary policy portfolios, reporting a further improvement in the sustainability profile of those investment portfolios in 2025 under the Eurosystem’s common framework. Climate factors remained embedded in investment and risk management, key transition-risk indicators declined for both sovereign and non-sovereign holdings, and the report adds separate Scope 3 emissions indicators for non-government issuers to improve transparency. Year on year, weighted average carbon intensity fell 4% for sovereign issuers and 8% for non-sovereign issuers, while carbon footprint fell 4% and 24% respectively. For sovereign holdings, absolute carbon emissions increased as the portfolio grew, but relative metrics improved because allocation shifted toward lower-emission issuers. For non-government holdings, Scope 1 and 2 absolute emissions and all main relative carbon metrics declined despite higher investment, while Scope 3 relative indicators also fell even as total Scope 3 emissions rose slightly. The share of green, social and sustainable bonds in the non-monetary policy portfolios increased to 15.1% in 2025 from 12.7% in 2024 and 10.4% in 2023. The bank said these portfolios remain on a gradual decarbonisation path aimed at net zero by 2050, in line with the Paris Agreement and European Union climate-neutrality goals. It plans to calibrate intermediate decarbonisation targets for individual portfolios, continue annual reviews of its green bond holdings target and further refine disclosures as climate data and methodologies improve.