Frank Elderson: Taking action for nature – investing in economic resilience and prosperity
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Banking Supervision website version of Frank Elderson's COP17 speech: protecting nature is an investment in resilience and prosperity. He notes that the ECB requires banks to identify and manage nature-related risks and that these already feature in its monetary policy assessment.
Key points
- 72% of euro area firms depend on at least one ecosystem service, and 75% of corporate lending goes to highly dependent companies
- A 1-in-100-year drought could put up to 24% of euro area output at risk
- The ECB expects banks to manage nature-related risks alongside climate risks
- Food price increases after heatwaves and droughts are an upside risk to inflation
Who is affected
Supervised banks, firms and monetary policy
Plain-language version
At COP17, Frank Elderson, vice-chair of banking supervision at the ECB (the euro area's central bank), stressed that looking after nature protects the economy. The ECB requires banks to spot and manage nature-related risks, since 75% of business lending goes to firms that rely heavily on it. A once-in-a-century drought could put up to 24% of euro area output at risk.
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Summary produced with artificial intelligence from the official publication. It may contain errors: always check the original document.
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