The direct economic impact of extreme weather events (floods, fires) on bank balance sheets and insurance sectors.
As we move forward, the "practice" of central banking will likely see a more integrated approach where environmental data is treated with the same rigor as GDP or inflation figures.
The risk that sudden policy shifts or technological breakthroughs will lead to "stranded assets"—investments in fossil fuels that lose value overnight. 2. Practice: Greening the Monetary Policy Toolkit
