The European Central Bank (ECB) has published the November 2025 update of its climate change indicators, a set of statistics designed to strengthen the financial system’s ability to understand and measure developments in sustainable finance and climate-related risks, both transition and physical.
The update introduces new datasets, more refined methodologies and greater data granularity, with the aim of supporting economic, financial stability and monetary policy analyses that are increasingly integrated with climate-related dimensions.
Sustainable finance: continued growth, but at a more moderate pace
Indicators related to the issuance and holdings of sustainable debt securities in the euro area show significant growth over the medium term, while also highlighting a recent slowdown.
Over the past four years, the total outstanding amount of sustainable debt securities issued in the euro area has nearly quadrupled, rising from €453 billion in 2021 to €1,740 billion in September 2025. However, over the past year growth has slowed to around 10%, compared with 20% in the previous year. A similar trend can be observed for holdings, which reached €1,960 billion in June 2025, with more moderate growth than in the past.
The November 2025 update enhances these indicators with new breakdowns by currency of denomination, original maturity and interest rate type, offering a more detailed view of the market and aligning with the recommendations of the G20 Data Gaps Initiative on climate finance.
Transition risks: financial portfolios gradually decarbonising
With regard to transition risks, the data point to a significant signal: the reduction in financed emissions is occurring without a contraction in lending or investment volumes.
Between 2018 and 2023, in banks’ loan portfolios, financed emissions declined by 45%, while carbon intensity and carbon footprint fell by more than 40%. This decrease occurred despite a 17% increase in the overall value of the portfolios analysed.
A decline in financed emissions and carbon intensity indicators is also observed in securities portfolios between 2018 and 2024, alongside a significant increase in exposures. Overall, the indicators suggest a progressive reallocation of capital towards less emissions-intensive activities, consistent with climate transition processes.
Physical risks: rising exposures and territorial differences
Particularly relevant are the results related to physical risk indicators, which measure financial institutions’ exposure to extreme climate events and structural phenomena such as water stress, heatwaves and changes in precipitation patterns.
The analyses show that, under high-emission climate scenarios, the share of exposures classified in the highest risk category increases significantly by the end of the century. Risks related to prolonged drought periods and water stress appear to be particularly critical.
From a geographical perspective, marked differences across euro area countries emerge. Southern European countries, in particular Spain, Portugal and France, show a more pronounced increase in high water-stress risk exposures, while northern European economies record more limited increases. These divergences reflect differing levels of climate vulnerability across territories and pose specific challenges for financial risk management.
Why these indicators matter
The update of the ECB’s climate change indicators confirms that climate change is not only an environmental issue, but a structural source of economic and financial risk. The availability of comparable and methodologically robust data enables:
- better integration of climate risks into decision-making processes by banks and investors;
- more effective support for public policies and supervisory activities;
- greater transparency on progress in sustainable finance and on the resilience of the European financial system.
In this context, the ECB’s climate change indicators represent a key tool to support the transition towards a more sustainable economy, while also highlighting the areas where physical and transition risks require increasing attention.
