Once focused narrowly on price stability and financial supervision, central banks now regularly speak about climate-related challenges, evoke green finance initiatives, and discuss the broader implications of decarbonization for financial markets. This evolution raises fundamental questions about the changing nature of central banking: What drives institutions traditionally focused on monetary policy to engage with environmental issues? How do they frame these new challenges within their existing mandates? And crucially, how do financial markets respond to this expanding scope of central bank communication?
Warning Words in a Warming World
Our recent paper tackles these questions by introducing a novel dataset – the CBS dataset – featuring 35,487 speeches delivered by 131 central banks between 1986 and 2023 (Campiglio, Deyris, Romelli and Scalisi, 2025). This dataset represents a significant advancement over commonly used repositories in the literature on central bank communication, such as the one managed by the Bank for International Settlements. The CBS dataset is freely available, together with an interactive exploratory tool.
Using natural language processing techniques, we identify central banks’ climate-related speeches and apply a structural topic model to classify them into two distinct narratives: one focused on green finance opportunities and another on climate-related risks. These narratives—aligned with the ‘promotional’ and ‘prudential’ approaches to climate integration in central banking (see Baer, Campiglio and Deyris, 2021) — exhibit significant heterogeneity across institutions and time. Surprisingly, our regression analyses show that neither physical nor transition risk exposure correlates with increased climate communication in either topic. Instead, institutional factors—including financial supervisory responsibilities, central bank independence, and NGFS membership— play a decisive role in driving climate-related discourse.
We also find that central bank communication materially affects financial markets. Firms with stronger environmental performance see their stock returns rise relative to peers when central banks emphasize climate issues, especially through the prudential lens of climate-related financial risks. This result is robust across various tests, emerging from both U.S. portfolio analysis and firm-level analyses across 41 countries. These findings also persist under alternative environmental metrics and econometric specifications, underscoring the material impact of central bank climate communication on financial asset valuations.
An emerging literature
Despite the growing recognition of central bank communication’s influence on financial markets, its climate-related dimension remains underexplored. Arseneau, Drexler and Osada (2022) were among the first to study the evolution of climate-related communication by central banks, focusing how this has been interacting with financial stability and macroprudential policy concerns. Building on these foundations, Arseneau and Osada (2023) show how central bank mandates shape climate messaging: central banks with explicit sustainability objectives tend to focus narrowly on that lens, while those with indirect mandates address climate concerns through traditional goals of price and financial stability.
Lastly, Feldkircher and Teliha (2024) find that central bank independence and NGFS membership strongly correlate with climate-focused communication, but explicit sustainability mandates do not significantly affect discourse. All these contributions are based on the BIS dataset of central bank speeches.
A parallel stream of research has instead explored how climate-related risks and policy changes affect the pricing of financial assets. Ardia, Bluteau, Boudt and Inghelbrecht (2023) develop a Media Climate Change Concerns index using U.S. media text and find that unexpected increases in climate-related concerns tend to increase the price of cleaner stocks while depressing the price of dirtier ones. Bauer, Offner and Rudebusch (2023) examine the impact of developments related to the Inflation Reduction Act, demonstrating significant differential effects between green and dirty stocks across multiple firm-level measures of environmental performance. In a related study, Bauer, Offner and Rudebusch (2024) analyse European Central Bank monetary policy shocks, finding that more carbon-intensive firms are more negatively affected by policy tightening than greener firms, suggesting that higher interest rates do not disproportionately hinder investments in green projects critical to the sustainable transition.
Conclusion
Our study brings together these two literatures, providing the first integrated analysis of the heterogeneity in climate-related narratives, their institutional and economic drivers, and their market implications. By introducing a comprehensive dataset of speeches that extends beyond the BIS collection, we provide a global perspective that includes a wide range of countries and institutional contexts.
Beyond these immediate findings, our dataset opens numerous avenues for future research. Scholars can investigate how central banks communicate about other emerging challenges, from digitalization to inequality, or explore how communication patterns vary across different institutional frameworks and cultural contexts. The multilingual nature of our dataset also enables research into how central banks adapt their messages for different audiences. As central banks continue to evolve and take on new challenges, we hope our work provides a foundation for understanding how these crucial institutions communicate and influence economic behaviour.