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Climate change and banking supervision

Climate change is a source of financial risk

Climate change affects the safety of our banking sector through physical risks, such as extreme weather events, as well as transition risks, such as uncertainties relating to the shift towards a low-carbon economy.

In our role as a supervisor of European banks, we work to ensure that banks detect, manage, and disclose risks properly, including those stemming from climate change. This helps banks to become more resilient to climate and transition shocks, which in turn contributes to the safety and soundness of the euro area banking sector and financial system as a whole. 

Results of the 2022 climate risk stress test

Despite some progress being made, our first ever climate risk stress test showed that banks were still lagging behind in several areas.

Press release

Guide on climate-related and environmental risks

How exactly do we expect banks to manage and disclose climate and environmental financial risks? We offer a detailed explanation in our supervisory guide.

Press release

How banks manage climate and environmental risk

Banks must adjust their practices and speed up their efforts to tackle climate and environmental risks. Unfortunately, all supervised banks were far from meeting our expectations as of November 2021.

Press release

How banks disclose climate and environmental risks

Banks need to improve their practices for disclosing climate and environmental risks. Regulations for this type of disclosure will become stricter in the future, with market participants and the general public increasingly expecting more information.

Press release

Supervisory priorities for 2022-24

Our list of supervisory priorities identifies climate and environmental risks as a key vulnerability for banks and describes how we will address this issue in our role of supervisor.

Supervisory priorities

Thematic review on climate and environmental risks

Banks need to intensify their efforts in measuring and managing climate and environmental risks. Our 2022 thematic review demonstrates our commitment to fully integrating these risks into the day-to-day work of our supervisory teams.

Speech by Supervisory Board Vice-Chair Frank Elderson

Climate change and the ECB

As a central bank and supervisor, climate change has a significant influence on all of our responsibilities. That’s why we’re taking action on all fronts to play our part in tackling this global challenge.

The ECB’s other actions on climate change

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Whistleblowing