risks under current prudential rules. The ECB also announced that banks in the Euro-zone will be stress tested on their ability to withstand climate change-related risks. In addition to disclosure requirements and stress testing, some Central Banks are considering the possibility of steering or tilting the allocation of their assets to favour the less polluting issuers . This, in turn, would translate into lower cost of capital for cleaner sectors, significantly accelerating the greening of the real economy.
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report