Climate change doesn’t leave the financial sector cold
The ECB has published new climate-related indicators for the financial sector, in cooperation with the national central banks. These indicators provide information on the climate risks to which financial institutions are exposed, based on the corporate securities and loans in their portfolios. Indeed, the companies to which banks lend or whose securities they hold emit greenhouse gases and may face physical climate risks, such as flooding. In addition, the indicators estimate the share of green bonds in bank portfolios. In this blog, we explain why these climate-related indicators are important for the financial sector and society as a whole.