These risks are not distinct, because rising physical risks make a disorderly transition more likely – a combination Mark Carney has termed “the tragedy of the horizon”.9 So it’s crucial that both the public and the private sector take these risks into account more systematically, for instance by setting higher standards for climate risk disclosure.
We’re already seeing progress in the private sector, especially among large investors, and France is leading the way at the country level.10 The Commission’s Green Deal agenda sees European standards on disclosure being tabled in the course of 2020. At the ECB, we will also do our part – and we are already starting to promote climate risk disclosure across our range of tasks.