ECB and BlackRock Warn: Climate Shocks Intensify, "Persistent" Risks Emerge

The European Central Bank's chief climate official says a new dynamic is taking shape: the cumulative impact of extreme climate shocks is turning into a distinct category of risk. "A slow-burning, long-term impact is emerging. It triggers secondary effects, disrupts supply chains and even harms labor productivity," said Irene Heemskerk, head of the ECB's climate change center, in an interview. A BlackRock executive also recently issued a similar warning, as so-called chronic climate risk draws increasing attention. The risk describes a scenario in which the financial and economic losses from sudden extreme weather such as floods, wildfires or droughts recur with a frequency that makes future prevention increasingly difficult.