Climate and environmental related risks: time for action for banks and their supervisors

The European Commission is dedicated to transform the EU economy into a sustainable economy, while also dealing with the inevitable consequences of climate change. Banks will be at the heart of it, financing the transition to a more sustainable economy. In the process, banks are being exposed to physical and transition risks as a consequence of climate change. For several years the ECB has identified banks’ exposure to these risks as one of the main vulnerabilities in the European banking sector. This presentation will go into what these risks mean, how the ECB supervises them and what the legal mandate is to do so. In addition, the regulatory and supervisory framework is rapidly evolving. This presentation will explain what is to come.