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Climate change is a clear and present danger to economic stability. Central banks and supervisors must play their part to manage the associated risks.

Christine Madeleine Odette Lagarde

Speech as ECB President at the **COP26** summit, **2021** · Checked on 1 March 2026
Climate change is a clear and present danger to economic stability. Central banks and supervisors must play their part to manage the associated risks.

Analysis

Lagarde’s remark aligns with the **ECB’s 2021 climate action plan**, which explicitly identifies climate change as a systemic risk to economic stability and assigns central banks a role in mitigation through stress testing, disclosure frameworks, and monetary policy adjustments. Her statement is consistent with **public records of her COP26 speech** (ECB press release, Nov 3, 2021) and subsequent ECB publications. Independent analyses (e.g., **Network for Greening the Financial System, NGFS**) corroborate the materiality of climate risks to financial systems, reinforcing the claim’s validity.

Background

The ECB formally adopted a climate agenda in 2020–2021, citing evidence that physical risks (e.g., extreme weather) and transition risks (e.g., carbon pricing) threaten asset valuations and bank solvency. Lagarde’s leadership on this issue reflects broader global trends, with over **90 central banks** (per NGFS) integrating climate scenarios into supervision. COP26 marked a pivotal moment for financial regulators to commit to climate-aligned policies.

Verdict summary

Christine Lagarde’s 2021 COP26 statement accurately reflects the ECB’s official stance on climate risks to financial stability and the role of central banks in addressing them.

Sources consulted

— European Central Bank (2021). *ECB presents action plan to include climate change considerations in its monetary policy strategy*. [Press Release, 8 July 2021](https://www.ecb.europa.eu/press/pr/date/2021/html/ecb.pr210708~48f8a6335c.en.html)
— European Central Bank (2021). *Speech by Christine Lagarde at COP26: ‘Monetary policy and climate change’*. [3 November 2021](https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp211103~6b6b8b4b5a.en.html)
— Network for Greening the Financial System (NGFS). *A Call for Action: Climate change as a source of financial risk* (2019). [NGFS Report](https://www.ngfs.net/sites/default/files/medias/documents/ngfs_first_comprehensive_report_-_17042019_0.pdf)
— International Monetary Fund (IMF). *The Role of Central Banks in Addressing Climate Change* (2021). [IMF Blog](https://www.imf.org/en/Blogs/Articles/2021/06/25/the-role-of-central-banks-in-addressing-climate-change)