European Central Bank emphasizes nature as economic infrastructure at COP17

by@ecb

Summary

During a keynote speech at COP17 in Yerewan on October 26, 2026, Frank Elderson, a member of the Executive Board of the European Central Bank (ECB), emphasized the crucial role of natural capital in driving economic resilience and prosperity. He argued that protecting and restoring ecosystems should not be seen merely as a cost but as a vital investment for long-term economic stability. Elderson highlighted that nature provides essential services that support approximately half of the world’s GDP, and that without adequate investment, economies face significant risks from nature degradation, which directly impacts financial stability. He called for greater commitment and action on nature-related financial risks, noting that integrating these concerns into central banking practices has become essential for ensuring economic security.

Analysis

World Bank: The World Bank is an international development institution that supports economic growth and poverty reduction through financing and policy advice to governments. It contributed analysis cited in the speech linking biodiversity and ecosystem services to a substantial share of global economic output. This reference underscores the speech's argument that natural capital underpins economic activity and resilience. Frank Elderson: Frank Elderson is a Member of the Executive Board of the ECB and Vice-Chair of its Supervisory Board. He delivered the keynote speech at COP17 Finance and Biodiversity Day, calling for accelerated action to treat nature as critical economic infrastructure. The address frames biodiversity loss and ecosystem decline as immediate risks to production, supply chains, and the broader financial system. European Central Bank: The European Central Bank serves as the central bank for the euro area, managing monetary policy, overseeing banking supervision, and promoting financial stability across member states. It has integrated nature-related risks into its core functions because ecosystem degradation can influence price stability, financial stability, and bank soundness. In the news, the ECB is the institutional home for the keynote address stressing that protecting natural capital is an economic investment rather than a competing expenditure. Economic Resilience: Preserving and restoring ecosystems is positioned as a strategic investment that enhances long-term prosperity, reduces vulnerability to disruptions, and supports economic security alongside climate goals. Central Bank Mandate: Nature degradation is recognized as directly affecting price stability and financial stability, making it a core consideration in monetary policy and supervision rather than an external environmental issue. International Networks: The Network for Greening the Financial System enables central banks and supervisors from dozens of countries to develop shared approaches for evaluating nature-related physical and transition risks.

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