Dear Readers,

Climate change and its consequences are becoming increasingly noticeable worldwide. Germany and Europe are no exception. More frequent extreme weather events, rising temperatures and the mounting associated strains on our economies are laying bare the challenges facing societies, businesses and governments. Transitioning to a net zero economy remains of central importance. The energy crises of recent years have made it clear just how dependent on fossil fuels many economies still are. 

At the same time, risks arising from nature and biodiversity loss are becoming increasingly prominent. The loss of biodiversity and degradation of ecosystems, which are closely related to climate change, can have significant economic and financial consequences.

These developments drive home the importance of joint action. The scientific consensus is clear: Further action and international cooperation are needed to contain the risks arising from climate change, nature loss and biodiversity degradation. Central banks play their part in these efforts by analysing the impact on the economy and the financial system and by taking greater account of climate-related and nature-related risks in their actions.

The Bundesbank is involved at national, European and global levels. For example, it contributes its expertise to the Network for Greening the Financial System (NGFS). At the Eurosystem level, too, we are committed to taking into account, and reporting on, consistent with our mandate, climate- and, increasingly, nature-related risks.

With its fifth set of climate-related disclosures, the Bundesbank is continuing its journey towards greater transparency. The report provides information on recent Bundesbank analyses and research and on climate- and nature-related aspects of our financial investments. And we are moving in the right direction: The greenhouse gas metrics of our euro-denominated own portfolio and of our sovereign investments have been declining, on the whole, since climate-related reporting began.

My special thanks go to all my colleagues at the Bundesbank who, with great commitment and a high level of specialist expertise, are helping to forge a better understanding of the impacts of climate change and the loss of nature on the economy and the financial system. Their work goes a long way towards addressing one of the major challenges of our time and strengthens the basis for a stable and resilient financial system.

Dr Sabine Mauderer
First Deputy Governor of the Deutsche Bundesbank