A comprehensive study published by the European Central Bank and partner institutions examines how natural disasters, biodiversity loss and climate change threaten price stability, financial stability and risk exposure in the euro area, Hungary, Brazil and other emerging markets. The research shows that ecosystem degradation reduces the resilience of the banking sector and calls for embedding nature‑related risks in stress testing, supervisory frameworks and corporate sustainability reporting. European Environment Agency findings emphasize floodplain protection, nature directive compliance, water resilience and PFAS pollution, recommending enhanced water‑saving measures and ecosystem protection. The report also compiles studies on global water risk, climate risk, biodiversity policy and nature‑related financial frameworks, and offers guidelines for central banks and macro‑prudential tools. Policymakers are urged to strengthen risk monitoring, disclosure and mitigation across the financial system.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op380.en.pdf
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