(ANSA) - ROME, JAN 24 - The ECB, in collaboration with the experts of some European central banks including the Bank of Italy, has equipped itself with a new set of indicators to assess the impact of climate risks on the financial sector and monitor development of sustainable finance.
The ECB and the Bank of Italy communicate this in a note, in which Isabel Schnabel, member of the Executive Committee of the ECB, explains that "we need a better understanding of how climate change will affect the financial sector" and "the development of high quality data is critical" as a step towards further progress towards a net-zero economy.
The new indicators, part of the ECB's climate action plan, concern the three thematic areas sustainable finance, transition risks and physical risks linked to climate change.
"The experimental indicators on sustainable finance provide an aggregate overview of the issues and redemptions of debt securities with a sustainability nature issued and held by subjects resident in the euro area", explains Bank of Italy.
Analytical indicators on transition risks "provide information on the exposure of intermediaries to transition risks, using data on financed carbon dioxide emissions and the carbon intensity of securities and loans held in portfolios".
Finally, the analytical indicators on physical risk measure the effects on the performance of the portfolios of financial institutions due to extreme natural events connected to climate change, such as floods (rivers and coasts), fires, landslides, erosion, hurricanes and water stress". (ANSA).