Elderson warns nature loss puts euro area output and banks at risk
Frank Elderson urged greater investment in nature at COP17 in Yerevan on October 26, 2026. The European Central Bank (ECB) Executive Board member said ecosystem degradation threatens output, price stability and bank resilience.
Water risks reach balance sheets
Elderson said 72 percent of euro area companies depend on at least one ecosystem service, while highly dependent firms receive 75 percent of corporate lending.
The World Bank estimates that up to half of global GDP relies on nature.
Research involving the ECB, London School of Economics and Oxford University puts up to 24 percent of euro area output at risk from a 1-in-100-year drought.
Nearly 12 percent faces risks from inadequate flood protection.
The European Commission estimates continued PFAS pollution through 2050 could cost society €440 billion; water treatment alone could exceed €1 trillion.
Ecosystem degradation raises costs, reduces productivity and disrupts supply chains, Elderson said, while heatwaves and droughts raise food-price inflation risks.
Bank frameworks outpace risk responses
More than 90 percent of ECB-supervised banks consider themselves materially exposed to climate and nature risks.
All have foundational risk frameworks, but two-thirds do not systematically connect nature-risk assessments to management responses.
Around one-third of practices in the ECB's updated compendium concern nature.
Elderson urged international cooperation through the Network for Greening the Financial System, whose 152 members span more than 95 countries, with 24 observers.
Its latest compendium offers 35 examples and six case studies.
Restoration is productive investment
Elderson framed nature restoration as investment in productive capacity, not a competing claim on prosperity.
He cited estimates that annual nature-based investment must rise from about $220 billion in 2023 to $571 billion by 2030, more than 2.5 times.
He called for greater private capital alongside public finance.