On 21 September 2021, the European Central Bank (ECB) issued the results of its economy-wide climate stress test. The test looked at the impact of climate change on more than four million firms worldwide and 1,600 euro area banks under three different climate policy scenarios.

The results show that, although the effects of climate risk would increase moderately, on average, until 2050 if climate change is not mitigated, they would be concentrated in certain geographical areas and sectors. When comparing the effects of transition and physical risk, the outcomes indicate that physical risk would be more prominent in the long run, especially if policies to transition towards a greener economy were not introduced. The results also suggest that for corporates and banks most exposed to climate risks, the impact would potentially be very significant, particularly in the absence of further climate mitigating actions.