EU Climate Risks Threaten Financial Stability: New Framework Launched

European Commission Launches Consultation on Climate Resilience Framework

Brussels, December 1, 2025 – The European Commission has launched a public consultation on a new climate resilience framework, aiming to bolster the EU's preparedness for the economic impacts of global warming.

The proposed framework would establish common guidelines and metrics for assessing the climate-related risks faced by companies and financial institutions across the 27-member bloc. It is part of the Commission's broader Sustainable Finance strategy, which seeks to mobilize private capital towards the transition to a low-carbon economy.

"Climate change poses systemic risks that threaten the stability of our financial system," said Valdis Dombrovskis, the EU's Executive Vice-President for an Economy that Works for People. "This new framework will help businesses and investors better understand and manage those risks."

Under the draft rules, large public companies and asset managers would be required to conduct climate stress tests and disclose their exposure to physical and transition risks. The goal is to improve transparency and allow investors to make more informed decisions.

"Investors are increasingly aware of climate-related risks, but many still lack the data and tools to properly assess them," said Carmine Di Noia, Commissioner for Financial Services, Financial Stability and Capital Markets Union. "This framework aims to provide a common EU-wide methodology to fill that gap."

The consultation will run until March 2026, with the Commission aiming to finalize the new rules by the end of next year. Industry groups have broadly welcomed the initiative, though some have called for a phased implementation to allow firms time to adapt.

"This is an important step towards building a more climate-resilient financial system," said Letizia Moratti, CEO of Deka Investment, one of Europe's largest asset managers. "The sooner we establish common standards, the better prepared we'll be to weather the economic impacts of global warming."