Central bank mandates have evolved with time beyond price stability and economic growth objectives to include financial stability, financial inclusion, and, more recently, climate change in some jurisdictions. This chapter analyses the potential role of central banks in dealing with increasingly significant climate risk. Existing literature suggests that physical and transition risks from climate change are key risks to macroeconomic and financial stability. The chapter argues that central banks should, therefore, at a minimum, incorporate climate risk in their macroeconomic and financial stability risk assessments to determine appropriate policy and regulatory tools for addressing them within the boundaries of existing mandates and underpinned by a transparent framework of decision-making and accountability. Central banks should avoid mission creep by remaining focused on achieving clear statutory objectives, while at the same time avoiding possible legal and credibility risks from doing nothing or too little, too late. The chapter further argues that central banks in emerging and developing economies face peculiar challenges in assessing the dynamics of climate risk, estimating potential impacts, and calibrating tools to address potential impacts on price or financial stability. It concludes by recognising progress at the international level and calls for additional guidance, particularly for central banks in emerging and developing economies, to help design proportional and effective central bank policy and regulatory measures to help contain significant climate risks they face.