The final report by the NGFS/INSPIRE joint Study Group referred to in this statement carefully explains how environmental degradation will expose financial institutions to physical and transition risks in a way that is very similar to climate change.
In spite of this, we have to admit that central banks, supervisors, regulators and international standard setting bodies have so far made less progress in integrating environmental risks than climate-related risks. Although the analytical framework for climate-related risks is largely applicable to environmental risks, the latter come with their own unique features and challenges.