Agnès Bénassy-Quéré: Speech - "Research Conference on Climate- and Nature-Related Risks in the Economic and Financial Systems"

Why It Matters

The findings reveal immediate financial system stress from environmental risks, prompting regulators to integrate climate considerations into monetary and fiscal policy frameworks.

Key Takeaways

• Nearly 200 papers submitted, showing research surge.
• Physical climate risks now impact inflation and growth.
• Vulnerable nations face higher sovereign borrowing costs.
• Central banks need robust data for climate policy.
• Ecosystem degradation adds macroeconomic uncertainty.

Pulse Analysis

The surge of scholarly work presented at the two‑day conference reflects a broader shift in academia and finance toward quantifying climate and nature‑related threats. Researchers are moving beyond theoretical models, delivering empirical analyses that link extreme weather events, biodiversity loss, and economic outcomes. This expanding evidence base equips regulators with the metrics needed to assess systemic vulnerabilities, a prerequisite for any credible climate‑adjusted policy agenda.

One of the most striking insights from the conference is the direct transmission of physical risks to sovereign debt markets. Studies showed that countries with high exposure to climate shocks and limited adaptive capacity experience elevated borrowing costs, a signal that investors price environmental risk into yields. This dynamic not only raises financing burdens for vulnerable economies but also amplifies fiscal pressures, potentially crowding out essential public spending and destabilizing debt sustainability.

For central banks and other policymakers, the implication is clear: climate and nature risks must be embedded in macro‑prudential surveillance and monetary strategy. Robust, high‑frequency data on physical exposures, transition pathways, and ecosystem services are becoming as critical as traditional economic indicators. As the research community continues to refine measurement tools, regulators will be better positioned to design climate‑responsive frameworks, mitigate systemic risk, and support a resilient financial system in an era of escalating environmental change.