Thread by @ecb

[THREAD] In a speech in London at the launch of the UN Climate Change @COP26 Private Finance Agenda, President Christine @Lagarde discusses climate change-related risks for the financial sector. Read the full speech ecb.europa.eu/press/key/date… (1/7)

@COP26 @Lagarde Lagarde: Climate change constitutes a major challenge, causing both threats and opportunities that will significantly affect the economy and the financial sector. (2/7)

@COP26 @Lagarde Lagarde: Insurance and economic losses caused by climate-related events are likely to start trending upwards as a share of GDP. Banks, insurance and reinsurance companies need to consider the risks such events create. (3/7)

@COP26 @Lagarde Lagarde: Early and coordinated action can help deliver a smooth transition to a carbon-neutral economy. But if intervention is delayed, the reduction in emissions may have to be sharper, resulting in a disorderly, disjointed and more disruptive transition for the economy. (4/7)

@COP26 @Lagarde Lagarde: Greater disclosure by companies on their climate exposure is a prerequisite, bolstering the ability of market participants and financial institutions to carry out appropriate risk assessment. (5/7)

@COP26 @Lagarde Lagarde: Substantial investment is likely to be required to underpin the energy transition, with some estimates running to hundreds of billions of euro each year in the EU alone. Meeting that challenge requires contributions from both the public and private sector. (6/7)

@COP26 @Lagarde Lagarde: The transition to a carbon-neutral economy provides opportunities, not just risks. By shifting the horizon away from the short term and contributing to a more sustainable economy, the financial sector can become a powerful force acting in our collective interest. (7/7)