Only price signals can make the financial sector more climate-friendly in the long run, explains Sebastian Mack in the Süddeutsche Zeitung.
"Banks, pension funds and insurance companies have not yet sufficiently built climate risks into their risk calculations and business models," the Süddeutsche Zeitung quotes from Sebastian Mack's latest policy brief. This hinders the green transition and endangers financial stability. That's why the EU must shift its focus from raising transparency about climate risks to requiring financial firms to hold more capital for unsustainable investments. Greening the financial system will happen only through price signals, our financial market expert continues.