New statistical data for analysing the impact of climate change on the financial sector

Climate change also poses a number of risks to the stability of the banking system. In order to analyse the impact of climate change on the financial sector more effectively, the Eurosystem has developed statistical indicators that it is publishing today. The more we know about the climate, the better we can identify and respond to the associated risks.

The Eurosystem is enhancing its work in the area of statistical data needed to address climate change-related risks in the financial sector. It has developed experimental and analytical indicators that are harmonised at the EU level and will facilitate the more comprehensive analysis of climate change and its impact on the financial sector.

Today, the ECB published: (i) experimental indicators on sustainable finance, which facilitate an overview of debt instruments characterised as sustainable, green, etc. and issued in the euro area; (ii) analytical indicators regarding carbon emissions financed by financial institutions, i.e. information regarding the financial sector’s exposure to stakeholders with carbon-intensive business models; (iii) analytical indicators regarding physical climate-related risks, which facilitate an analysis of the impact of natural disasters on the performance of financial portfolios.

The Eurosystem will further improve indicators. The aim of today’s publication is to kick-start the development of a methodology to better capture data regarding climate-related risks and about the green transition. Of assistance in this regard will be new data sources that will be available under the EU’s climate-related disclosure and reporting initiatives.

More about the project is available on the European Central Bank’s website.