Nicosia, Cyprus. The Central Bank of Cyprus said it continued to improve the sustainability profile of its non-monetary policy portfolios throughout 2025, according to its latest annual climate-related financial disclosures released this week. The report said the bank further reduced climate-related transition risks and fully integrated climate considerations into its investment processes, risk monitoring, and reporting practices.
Reserves and decarbonisation strategy
The bank’s total currency reserves stood at €1.77 billion at the end of May 12, 2025, an increase of €153 million compared with the previous year.
As part of its broader mandate, the bank said it aims to steer these portfolios toward a decarbonisation path aligned with the 2015 Paris Agreement goals and the European Union’s climate neutrality objectives.
Emissions disclosure and portfolio intensity
This year’s disclosure includes scope 3 relative metrics for non-sovereign issuers for the first time. These were reported separately from scope 1 and scope 2 emissions due to ongoing data quality challenges.
The data showed that the weighted average carbon intensity of the portfolios declined compared with 2024, indicating lower relative exposure to carbon-intensive issuers.
Sustainable bond holdings
The share of investments in green, social, and sustainability bonds rose to 15 per cent of total reserves by the end of 2025, up from 10 per cent in 2023.
The bank said it now holds €268 million in these sustainable instruments, while its dedicated green bond portfolio expanded by €38 million over the last year to reach €93 million.
Governance and oversight
Governance of these portfolios is overseen by the Governor and the Board of Directors, which hold ultimate responsibility for setting investment objectives.
In 2025, the bank established a Sustainability Committee at the Board level to assist in defining and reviewing the bank’s broader sustainability strategy.