Christine Lagarde: Climate change and the financial sector
Speech by Ms Christine Lagarde, President of the European Central Bank, at the launch of the COP 26 Private Finance Agenda, London, 27 February 2020.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Climate change constitutes a major challenge, causing both threats and opportunities that will significantly affect the economy and the financial sector, depending on which carbon emission scenario eventually unfolds.
That is why central banks need to devote greater attention to understanding the impact of climate change, including its implications for inflation dynamics. At the ECB, the ongoing review of our monetary policy strategy creates an opportunity to reflect on how to address sustainability considerations within our monetary policy framework.
Today, however, I will focus my remarks on climate change-related risks for the financial sector. Broadly speaking, the main risks fall into three categories: risks stemming from disregard, from delay and from deficiency.