The Bundesbank is a proud founding member of the NGFS, the Central Banks and Supervisors Network for Greening the Financial System. The work being done by the NGFS demonstrates that combating climate change is a key factor for the financial system. Climate change can have long-term impacts on economic structures and activities, productivity and other key macro variables, such as prices.
Even if mitigation strategies are put in place, societies and economies are likely to face increasing climate change-related disruptions and supply-side shocks. Apart from climate change itself, policy responses will affect macroeconomic activities as well, with implications for the financial system. We therefore look at climate change as a source of financial risk, both from the micro- and the macroprudential perspective.