Elderson links green investment to European competitiveness
Frank Elderson of the European Central Bank (ECB) urged Europe to combine climate adaptation, emissions mitigation and predictable investment policies. He spoke at the Green Swan Conference in Manila on October 19, 2026.
Water risks reach bank balance sheets
Elderson, ECB Executive Board member and Supervisory Board Vice-Chair, said climate and nature shocks increasingly affect productivity, inflation and financial stability.
Research puts up to 24 percent of euro area output at risk from severe water scarcity.
Insufficient flood protection exposes nearly 12 percent of output and more than 60 percent of loans.
Regional activity averages 1.5 percent lower two years after heatwaves and 3 percent lower four years after droughts.
Euro area inflation rose to 3.8 percent in September from 3.2 percent in August, mainly because of war-related energy pressures.
Summer heat and low water levels added electricity price pressures.
Elderson called for climate and nature risks to enter macroeconomic models and forecasts.
Investment needs meet policy uncertainty
Electricity supplies around 23 percent of EU final energy consumption; renewables provide close to half of electricity generation.
Elderson said electrification reduces fossil-fuel dependence and energy-price exposure.
The European Commission estimates additional green investment needs of €477 billion annually until 2030; ECB analysis puts needs at 2.7-3.7 percent of EU GDP.
He identified uncertainty and access to finance as barriers, calling for predictable policies, deeper capital markets, bank financing and international cooperation.
Resilience requires both tracks
Elderson rejected a choice between competitiveness and the green transition.
He argued that adaptation protects operations while mitigation limits future damage and adaptation costs.
For banks, the distinction is already tangible: credit standards ease for transitioning firms but tighten for high emitters without credible plans.