Frank Elderson: From climate and nature risks to economic resilience and competitiveness

Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the Green Swan 2026 Conference

We are living in a time of profound economic, geopolitical and technological uncertainty. Yet amid all this uncertainty, one thing is clear: climate change and nature degradation will continue to shape our economies and societies, and we will have to deal with the consequences. Climate change and nature degradation are a certainty in an uncertain world. The events of this summer have reminded us of that reality in the most tangible way possible.

For Europe, the summer of 2026 was not simply another warm season. It was the warmest summer ever recorded in Western Europe, marked by severe droughts, devastating wildfires, water scarcity and mounting pressure on ecosystems across the continent.[1] Water levels in major European rivers fell to exceptionally low levels, affecting transport, industry and energy production. At the same time, large areas of land were destroyed by fires and important economic sectors faced disruptions.[2] Europe is warming faster than any other continent at more than twice the global average.[3] The human toll has been severe, with tens of thousands of excess deaths linked to extreme heat recorded during the summer months.[4]

This summer also served as a reminder of how much our economies depend on nature. Water scarcity affected not only households and agriculture, but also manufacturing, transport and energy production. Across Europe, pressure on ecosystems highlighted the fact that healthy forests, soils, rivers, wetlands and oceans are not just environmental assets, but that they provide essential ecosystem services on which economic activity relies every day, and which often go unnoticed until they are put under strain.[5]