Climate Stress Test of Banks: Climate risks not taken serious
Press Release Rasmus Andresen
Brussels, 8.7.2022
Climate Stress Test of Banks: Climate risks not taken serious
The European Central Bank published the results of its climate stress test today: https://www.bankingsupervision.europa.eu/press/pr/date/2022/html/ssm.pr220708~565c38d18a.en.html
Rasmus Andresen, head of the delegation of the German Greens in the European Parliament, member of the Committee on Economic and Monetary Affairs and the European Parliament’s rapporteur on this year’s ECB report, comments:
„The results of the climate stress test clearly show that banks are not taking climate risks seriously enough.
This is a major concern for investors and all users of banking services, as banks fail to address one of the most pressing and serious risks of our time: climate change. This affects the security of banks and the funds they manage.
Banks‘ failure to take climate risk into account poses a problem for overall financial stability, as banks are not prepared to absorb the losses in the event of extreme weather events , which are becoming more and more frequent.
The disappointing results also show that there is an urgent need for ambitious and stringently enforced legislation, as banks do not appear to be sufficiently following voluntary recommendations.
It is crucial that the banks finally create their own transition plans. They should also closely monitor their clients‘ transition plans, particularly those highly exposed to fossil fuel-intensive sectors.
Regulators must also use all their tools to ensure that banks take climate risks seriously.“