What lies ahead on our path to a greener future? How can we assess the impact of extreme weather on the economy? And how can we tackle financial risks from nature loss and degradation? With its new climate and nature plan, the ECB is stepping up its work in these areas over the next two years.

Our host Stefania Secola discusses this and more with the head of the ECB’s climate change centre, Irene Heemskerk.

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

Published on 31 January 2024 and recorded on 23 January 2024.

In this episode:

01:00 – The ECB’s work on climate

What has the ECB done so far to help tackle climate change, what does it plan to focus on going forward and why is this work important?

04:35 – The intensifying climate crisis

As global temperatures rise and extreme climate events become more frequent and more devastating, what is the impact on the economy and the financial system? What can the ECB do about it?

07:40– Keeping the green transition on course

Time is running out to contain global warming and meet the Paris Agreement targets. Governments are in the driving seat but we’re all heading in the same direction. How can economic analysis contribute to these efforts, and how can we unlock the funds needed to keep the green transition moving forward?

13:15 – Defining a role for monetary policy

The ECB has already tilted its corporate bond holdings towards issuers with better climate performance. What else can it do, within its mandate, to support the green transition? What role can interest rates play?

15:00 – From climate change to environmental crises: nature and biodiversity loss

Euro area firms and banks are highly dependent on nature, but nature is being rapidly devastated by human activity. What are the economic and financial risks stemming from nature degradation?

17:22 - Our guest’s hot tip

ECB climate change centre head Irene Heemskerk shares her hot tip with our listeners.

Additional material:

Press release: ECB steps up climate work with focus on green transition, climate and nature-related risks, 30 January 2024

https://www.ecb.europa.eu/press/pr/date/2024/html/ecb.pr240130~afa3d90e07.en.html

The ECB’s climate and nature plan 2024-25

https://www.ecb.europa.eu/ecb/climate/our-climate-and-nature-plan/html/index.en.html

Climate change and the ECB https://www.ecb.europa.eu/ecb/climate/html/index.en.html

The ECB’s publications on climate change https://www.ecb.europa.eu/home/search/html/climate_change.en.html

The ECB Podcast: What biodiversity and nature loss mean for our economy, 25 November 2023

https://www.youtube.com/watch?v=DP3tRzELPLY

European Central Bank

www.ecb.europa.eu

www.bankingsupervision.europa.eu