ECB urges banks to 'step up' climate risk management

The European Central Bank on Friday called on banks to improve their preparations for future environmental risks as it published the results of its first "climate stress test".

The headquarters of the European Central Bank (ECB) is pictured in Frankfurt am Main, western Germany. (File photo: AFP)

Banks in the eurozone "must urgently step up efforts to measure and manage climate risk", said Andrea Enria, the ECB's supervisory chief. The exercise, in which 104 banks participated, showed that "around 60 percent" did not have the necessary assessment frameworks and many "lack relevant data" to assess climate risks in their portfolio.