The European Central Bank has announced the conclusion of its two-year project to embed climate and nature risks into its processes and policy framework.
Moving forward, it will intensify work on three priority areas:
- The transition to a green economy: Assessing banks’ prudential transition plans; analysing energy and fiscal costs; and further incorporating climate-related considerations into its operational framework
- Managing the physical impacts of climate change: Strengthening macroeconomic analysis; improving data and risk monitoring; and analysing banks’ capabilities to overcome challenges
- The impact of nature-related risks and ecosystem degradation: Assessing the impact of water-related risks
“These priorities will complement the ECB’s ongoing climate-related actions covering monetary policy, banking supervision and financial stability,” the statement reads. “The ECB will also continue to improve data relevant to its work and refine its climate-related indicators and disclosures.”
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