ECB’s Elderson: Addressing Climate Risks a Part of Central Bank’s Mandate

27 February 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Executive Board member Frank Elderson on Tuesday said that as climate risks directly affect financial stability, they should be addressed by central banks.

Speaking at an online panel organised by the International Sustainable Finance Centre of Excellence, Elderson said that ‘central banks and supervisors over the last years have come to the conclusion that nature and climate-related risks translate into financial risks and therefore fall squarely within the mandate of supervisors and central banks.’

Climate-related topics were ‘very high’ on the ECB’s agenda, he said, citing the recent publication of the climate and nature plan 2024-2025.

‘We will continue and expand on previous climate-related work in three strategic objectives within our mandate, of course, we will expand work on navigating the transition, addressing the fiscal impacts of climate change and improving our understanding on the impacts of nature loss’, he said.

Funding for adaptation and nature-related solutions should be a priority, he said, arguing that most funding should come from the private sector.

‘We need to move forward on international climate policies and the regulatory framework, which is conducive for levelling up private flows’, he said.