MNI BRIEF: Climate Should Be In All Bank's DNA - ECB Elderson

Climate and environmental risks must become part of the DNA of every euro area financial institution, ECB Executive Board member Frank Elderson said during a panel discussion Friday, with supervisory authorities expecting to receive action plans this year and preparing on-site visit to fully assess bank’s risk management practices.

Last year’s self-assessment exercise found no evidence of greenwashing by banks under ECB prudential supervision, Elderson said, However, no bank was in complete compliance with all requirements, and many did not comply with a large number.

“This year the rubber is going to hit the road,” Elderson said, citing upcoming microprudential climate stress tests and a thematic review that is expected to reveal how well banks have incorporated climate and environment-related risk into their risk and business models. “The time has come to really take this dead serious, to make it become the DNA of every banking institution in Europe."