Frank Elderson: "Come hell or high water"- addressing the risks of climate and environment-related litigation for the banking sector

Keynote speech by Mr Frank Elderson, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the European Central Bank, at the ECB Legal Conference, Frankfurt am Main, 4 September 2023.

Central bank speech  | 
05 September 2023

It is a pleasure to welcome you to Frankfurt and to the ECB's Legal Conference. Arriving this morning and seeing such a large gathering of lawyers – attentive, curious and pleased to see old friends again – I am reminded of the "back-to-school" feeling after the summer.

I hope my intervention today can channel that energy towards the major challenge of our time: the climate and environmental crises. After all, summers now are very different from those we may remember from our youth.

Some Europeans faced hell this summer. Record-breaking heatwaves scorched the Mediterranean. Forest fires claimed lives and destroyed homes in Greece. And residents in northern Italy and central Europe were hit by extreme flooding. Meanwhile, similar disasters have been unfolding worldwide. Canada is experiencing its worst wildfire season on record. Wildfires in Hawaii killed more than 100 people. And recent flooding in China is thought to have displaced over one million people. Without human-induced climate change, these events would have been virtually impossible. Back in 2015 Mark Carney spoke about the tragedy of the horizon. Eight years on, we have arrived at that horizon. The tragedy is upon us and it has started to unfold.

Today is therefore an appropriate moment to recall one of the key channels through which Mark Carney anticipated that the financial sector – and financial stability – would be affected by the climate crisis: liability risk. And by that I am referring to climate and environment-related litigation.