The role that the financial sector in combating climate change is extremely significant, said Irene Heemskerk, head of the European Central Bank's (ECB) Climate Change Center, told Report.
"We already recognize the importance of managing climate risks. These risks include physical risks, weather changes, natural disasters, and transition risks associated with the transition to a zero-carbon economy. Financial institutions need to be better prepared for these risks," she noted.
Heemskerk pointed out that the ECB is trying to support the development of a green finance system and the transition to a zero-carbon economy. "We are promoting green bonds and working to ensure that financial markets are regulated in line with climate goals," she said.
According to her, the transition to a net-zero and nature-positive economy depends not only on regulatory frameworks but also requires the active participation of the private sector.
"There are many opportunities for the financial sector in this transition, and we must take advantage of them. The work done by the Network for Greening the Financial System (NGFS) in this area is very important. We support the NGFS initiatives and closely monitor the activities of the financial sector in this direction," Heemskerk emphasized.
She advised financial institutions to develop more resilient strategies against climate change and expand green financial instruments. "The financial sector needs to be more active and resilient in the fight against climate change," Heemskerk urged.