Recital 38

(38) The unprecedented scale of transition towards a sustainable, climate-neutral and circular economy will have considerable impacts on the financial system. In 2018, the Network of Central Banks and Supervisors for Greening the Financial System acknowledged that climate-related risks are a source of financial risk. The communication of the Commission of 6 July 2021 entitled ‘Strategy for Financing the Transition to a Sustainable Economy’ (the ‘Renewed Sustainable Finance Strategy’) emphasises that ESG risks, and risks arising from the physical impact of climate change, biodiversity loss and the broader environmental degradation of ecosystems in particular, pose an unprecedented challenge to the Union’s economy and to the stability of the financial system. Those risks present specificities such as their forward-looking nature and their distinctive impacts over short-, medium- and long-term time horizons. The specificity of climate-related and other environmental risks, for example risks arising from environmental degradation and biodiversity loss, as regards both transition and physical risks, requires in particular the management of those risks with a long-term time horizon of at least 10 years.

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Source: EUR-Lex CELLAR · retrieved 2026-09-04 · Text as adopted (Official Journal); later amendments are not incorporated in this text.