The European Central Bank has published a damning assessment of the alignment of European banks’ credit portfolios with the Paris climate agreement, saying it exposes banks to heightened transition, reputational and litigation risk.
Its assessment, published in January, found that a “staggering” 90 per cent of the 95 “significant institutions” analysed are misaligned with the targets set out in the Paris climate agreement. Approximately 70 per cent of banks are subject to elevated reputational and litigation risk.
