No major bank in the eurozone meets all of the European Central Bank’s expectations in assessing climate-related risk and they should expect increased pressure from their supervisor to adjust, ECB board member Frank Elderson said on Wednesday.

“The great majority of European banks are not even close to where they should be – and they know it: 90 per cent of reported practices are deemed by the banks themselves only partially or not at all aligned with the ECB’s supervisory expectations,” Elderson said in a speech.

He said over half of the banks supervised by the ECB have no approach for assessing the impact of climate risks and only around 40 per cent of banks have assigned explicit responsibility for managing climate risks to the management body.

“The ECB will see to it that every bank is making expeditious progress in embedding climate risks into their organisations, by following up with supervisory requirements where needed,” Elderson added.