The European Banking Authority (EBA), as a member of NGFS, supports the declaration highlighting the economic risks of climate inaction, released at COP30 in Brazil. It emphasizes the need for climate risk management in financial institutions.
The European Banking Authority (EBA), as an active member of the Network for Greening the Financial System (NGFS), announced support for the NGFS Declaration on the Economic Cost of Climate Inaction at COP30 in Belém, Brazil, in 2025.
The declaration highlights the increasing macroeconomic and financial risks associated with delayed climate action. It warns that a three-year delay could reduce transition effectiveness by half, with transition costs rising from 0.5% to 1.3% of global GDP by 2030.
It stresses that climate-related shocks could cause global spillovers, disrupting food, energy, and supply chains, leading to macro-financial instability and impacting vulnerable economies.
The declaration calls on financial institutions to incorporate climate and nature-related risks into their strategies through scenario analysis, disclosure standards, and transition planning. It also emphasizes the importance of climate risk tools, such as climate scenarios, for central banks and supervisors.
The EBA is committed to supporting the greening of the financial system, aligning with its Roadmap on sustainable finance. It integrates sustainability factors into EU banking regulation, promotes climate risk assessment and management, and enhances transparency through climate disclosures and the ESG risk dashboard. Climate considerations are also incorporated into stress testing activities.
José Manuel Campa, EBA Chairperson, stated that financing sustainability is a key opportunity for the EU banking sector, and managing ESG-related financial risks is essential. François-Louis Michaud, EBA Executive Director, emphasized the importance of robust environmental risk management for effective transition funding.
The NGFS, launched in December 2017 at the Paris One Planet Summit, comprises 146 central banks and supervisors and 23 observers, sharing best practices to develop climate risk management and mobilize finance for a sustainable economy.
