ECB Guide on climate-related and environmental risks: a commentary
Since the adoption of the Paris Agreement and the UN 2030 Agenda for Sustainable Development in 2015, the importance of sustainability in the investment process gained momentum. Increasingly, climate-related and environmental risks need to be investigated and mitigated when possible.
With the release of the ‘Guide on climate-related and environmental risks’ by the European Central Bank, the significance of these risks in Europe became even more apparent. Soon, a regulator will demand a thorough investigation of these risks, and not only a prudent risk manager.
With this paper, Probability and Partners would like to assist financial institutions in understanding the implications the ECB guide has for them, as well as help them prepare for the future where climate-related and environmental risks are a part of everyday reporting.
In the next section, we discuss the key points of the ECB guide. Section 3 contains our advice on how to proactively prepare for the upcoming regulation and Section 4 concludes.