Greening the financial system: milestones in our climate change journey

What did our climate stress test show? How will we integrate climate change into monetary policy?

Our host Katie Ranger puts these and other questions to Executive Board member Frank Elderson on the ECB Podcast.

The views expressed are those of the speakers and not necessarily those of the European Central Bank.

Published on 9 July 2022 and recorded on 7 July 2022.

In this episode:

01:09 – Our first ever banking supervision climate stress test

What we looked at in our supervisory climate stress test and an overview of the transition risks and physical risks facing banks.

05:32 – Results of the climate stress test for banks

How prepared banks are to tackle climate-related and environmental risks and what we learnt while performing the stress test.

18:58 – What are our next steps?

How the results of the climate stress test will feed into other banking supervision activities and how this will help banks integrate climate-related risks into their businesses.

20:32 – Incorporating climate change into our monetary policy

How we are turning our commitment to fighting climate change into real action and how we intend to move from being market-neutral to carbon-neutral.

25:11 – Why do we, as a central bank, need to play a role in tackling climate change?

How we can contribute within our mandate to the fight against climate change.

30:50 – Our guest’s hot tip

Additional material:

Press release: ECB takes further steps to incorporate climate change into its monetary policy operations, 4 July 2022

https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220704~4f48a72462.en.html

ECB climate agenda 2022, 4 July 2022

https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220704_annex~cb39c2dcbb.en.pdf

Press release: Banks must sharpen their focus on climate risk, ECB supervisory stress test shows, 8 July 2022

https://www.bankingsupervision.europa.eu/press/pr/date/2022/html/ssm.pr220708~565c38d18a.en.html

Climate risk stress tests – Final results, 8 July 2022

https://www.bankingsupervision.europa.eu/ecb/pub/pdf/annex/ssm.pr220708_annex2.en.pdf

The ECB Podcast: Time to act now: results of the economy-wide climate stress test, 22 September 2021

https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod210922_episode20.en.html

The ECB Podcast: Tackling climate change as a central bank: Between motivation, obligation and limitation, 12 May 2021

https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod210512_episode16.en.html

The ECB Podcast: Climate change and the role of central banks, 3 March 2020

https://www.ecb.europa.eu/press/tvservices/podcast/html/ecb.pod200303_episode5.en.html

Climate change and the ECB

https://www.ecb.europa.eu/ecb/climate/html/index.en.html

Climate change and banking supervision

https://www.bankingsupervision.europa.eu/about/climate/html/index.en.html

European Central Bank

www.ecb.europa.eu

European Banking Supervision

www.www.bankingsupervision.europa.eu