At a keynote speech, Frank Elderson questioned the “fitness and propriety” of some finance executives in charge.

Elderson, a member of the executive board of the ECB and vice-chair of the Supervisory Board of the ECB, notified the finance sector that the ECB will hold it responsible for failures on environmental and climate risks.

The speech, entitled The decade of sustainable finance: half-time evaluation, was indeed made at the halfway point in what was envisaged to be a decade for sustainable finance, turned to risk, saying “While many steps have been taken, we cannot yet conclude that we are on track for a timely transition scenario. Rather, it is becoming increasingly likely that we will see an intermediate scenario with increased transition risks and physical risks from extreme weather events and nature degradation.”

And at this point the tone turned sharply to banking: “Although we have seen a number of good practices, at present none of the banks under our supervision fully meet all our expectations. Following our assessments, we have repeatedly urged banks to ensure the sound management of climate-related and environmental risks, using the ECB expectations as a starting point. In other words, we expect banks to manage C&E risks just like any other material risk they are exposed to.”

Threatening enforcement if guidelines are not met, Elderson said, “we and other banking supervisors around the world have consistently been emphasising is that failing to adequately manage C&E risks is no longer compatible with sound risk management. Such a failure also increasingly calls into question the fitness and propriety of those in charge of establishing and steering

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