ECB advances climate and nature risk integration after 2024-2025 plan

The European Central Bank (ECB) has further embedded climate and nature-related risks into its core activities by completing its climate and nature plan 2024-2025. Over the past two years, the ECB has refined its assessment of these risks, informing policy decisions, bank supervision, and portfolio management.

Climate and nature-related considerations are now more integrated across the ECB’s operations, including:

• Strengthening integration in the monetary policy framework, including the Eurosystem’s collateral framework and reducing carbon emissions from corporate bond holdings.
• Enhancing data and risk assessment through climate stress testing, scenario analysis, and updated statistical indicators.
• Improving banking sector resilience via ongoing supervision and binding decisions where necessary.
• Managing the ECB’s own operations and balance sheet with reduced emissions by 39% in 2024 compared to 2019, aligning with its 2030 environmental targets.
• Advancing work on nature, with explicit acknowledgment of the implications of nature degradation for monetary policy and research highlighting water-related risks as most material.

  The ECB emphasizes the growing economic and financial impacts of climate change and nature degradation. It remains committed to embedding these risks into its work by focusing on three priority areas:

  • Transition to a green economy, including assessing banks’ transition plans and further integrating climate considerations into operational frameworks.
  • Addressing physical impacts of climate change through strengthened macroeconomic analysis, improved data, and risk monitoring.
  • Assessing the impact of nature-related risks and ecosystem degradation, especially water-related risks.

  These efforts complement ongoing actions such as implementing climate factors in the Eurosystem collateral framework, developing scenario and stress test methodologies, and enhancing data and disclosures. The ECB will continue to contribute to European and global policy discussions on climate and nature risks. More information is available on the ECB’s website.

  For media inquiries, contact Carlijn Straathof at +49 170 348 7585.

  Share