ECB: disorderly climate transition will hit finance
The financial sector will suffer significant declines if the climate transition does not proceed in an orderly fashion. Abrupt climate risk revaluations will hit banks, asset managers and insurers particularly hard.
Losses in financial markets due to abrupt climate risk revaluations can hit investment funds and insurers hard. It can lead to defaults by companies and cause credit losses for banks. If we fail to ensure an orderly green transition, the risks will spread quickly throughout the financial sector, with companies and banks most at risk.