The ECB has decided to strengthen its strategy on climate change, also focusing more on "the growing impact of the climate crisis on the economy and the financial system".
In the new 2024-2025 plan, the central institute explains that there are three areas at the center of the renewed action: the implications of the green transition, the concrete impact of climate change, and the study of the risks to the economy linked to nature.
As regards the green transition, the ECB intends above all to verify the costs and necessary investments.
On climate change, the objective is to understand what impact measures to adapt to higher temperatures have on the economy.
Finally, on risks, we will aim to understand how they increase from the interaction between natural degradation and climate change, and how they change the economy and consequently also the functioning of monetary policy.
“A warmer climate and natural degradation are driving changes to our financial system,” said ECB President Christine Lagarde, explaining that to complete its mandate the ECB needs to broaden and strengthen the understanding and implications of such changes.
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