Photo by Joan Li on Unsplash
The African Development Bank warns a “super El Niño” could cost affected African nations up to US$20bn, while Tajikistan has launched Central Asia’s first sovereign sustainable-finance framework, and Australia begins to explore expanding its green taxonomy to include climate adaptation.
UK’s largest pension fund wants to understand climate tipping points
UK’s Nest, the countries public workplace pension scheme, is seeking proposals to understand how climate tipping points could impact portfolio resilience.
Climate scenarios such as those from the Network for Greening the Financial System (NGFS), often do not include tipping points, which are abrupt, often irreversible, changes to the Earth’s ecosystem.
Some tipping points have already been breached or are close to be being breached, such as the bleaching of coral reefs.
Nest Pensions told Environemental Finance that it was issuing a request because it wants to understand how such tipping points could affect its assets allocation and portfolios under different pathways.
ECB links slow electrification to inflation
Europe’s electricity mix has become cleaner and less exposed to fossil fuel price swings. However, the continent remains exposed to energy-import shocks because final energy use – particularly in transport, heating and industry – has not kept pace, European Central Bank (ECB) economists Daniela Arlia and John Hutchinson wrote in the ECB’s blog.
Renewables generated a record 47% of total EU electricity in 2024, yet electricity still accounts for only around 23% of Europe’s final energy use, against an indicative target of 46% by 2040.
“The less dependent the economy is on volatile imported fossil fuels, the less frequently monetary policy will be confronted with this kind of supply shock,” wrote the ECB economists.
Central Bank of Egypt makes environmental risk systems mandatory
The Central Bank of Egypt (CBE) is making the Environmental and Social Risk Management System (ESRMS) mandatory for banks by January 2028. In a memo to the chairpersons of banks’ boards, the CBE said the directive builds on a November 2022 circular requiring banks to integrate sustainable finance policies into credit and investment frameworks.
The requirements are designed to reinforce financial and banking sector stability by strengthening banks’ resilience to environmental and social risks, the central bank said. The announcement comes after several years of sustained advancements in the central bank’s climate risk capacity since joining the NGFS in 2022.
AfDB warns ‘super’ El Niño could cost Africa US$20bn
An impending “super El Niño” is likely to inflict a combined cost of between US$10bn to US$20bn on affected African countries and trigger mass migration, the African Development Bank’s (AfDB) top climate expert told Reuters.
“Just this event is going to reduce heavily affected countries’ GDP by 1% to 2% on average,” said Anthony Nyong, the AfDB’s director for climate change and green growth.
Nyong said Africa will now need as much as US$100bn in adaptation finance this year, against a prior need of about US$50bn.
MSCI Institute finds hidden adaptation economy
New research from the MSCI Institute finds a “hidden adaptation economy“.
The MSCI Institute found that 89% of the companies it analysed had taken at least one action to protect their operations from a specific physical climate hazard. Meanwhile, roughly half generate revenues from resilience-enabling products and services.
The MSCI report estimates the cost of asset damage and business interruption across the global listed equity universe could grow nearly fourfold, to US$4.6tn annually by 2050 under a 3°C warming scenario.
However, Linda-Eling Lee, founding director and head of the MSCI Institute, told Environmental Finance “there has not been very good systematic disclosure of companies’ risk management measures around adaptation and resilience”.
New water risk tool prices water stress for livestock investors
Chronic water stress will impose “substantial costs” on the world’s largest livestock companies by 2050, according to a new water risk monitor tool built by the Fairr Initiative with Blue Risk.
The tool draws on NGFS climate scenarios, and analysis using it found that of 18 listed companies across Australia, Brazil, China, France and the US, in the “most pessimistic scenarios”, costs could reach around US$9bn a year. While a drought every 10 years could create combined losses of US$17bn, 43% of that for Brazilian companies alone.
Many companies in the study disclosed just 1% of their “blue water” usage, which climate and nature economist Patricia Calderon warned could mean further hidden costs for investors.
Work begins to include climate adaptation in Australia’s green taxonomy
Several financial institutions are teaming up to expand Australia’s green taxonomy to include climate adaptation and resilience, according to Responsible Investor.
The Australian Sustainable Finance Institute (ASFI) convened earlier in August for an inaugural meeting on scoping out what would be needed for climate adaptation to be included. The committee includes several financial institution heavyweights, including Allianze, IFM, and Rabobank.
Experts had called for the taxonomy to include climate adaptation measures when it was adopted last year.
Tajikistan unveils Central Asia’s first sovereign sustainable-finance framework
Tajikistan has launched Central Asia’s first sovereign sustainable finance framework, laying the groundwork for an inaugural sovereign green-bond issuance.
The country’s ministry of finance developed the framework with support from the World Bank Group’s sustainable finance advisory program. The Eurasian Development Bank financed an independent second-party opinion through its technical assistance fund that ultimately found the framework fully aligned with international principles, rating it “excellent”.
Proceeds from green, social and sustainability bonds and loans issued under the framework could fund renewable energy, clean transport, water management, ecosystem protection, and social infrastructure.
The framework is intended to help Tajikistan diversify funding sources and attract ESG investors, while serving as a potential model for the wider Central Asian green finance market.
ISSB to consult on voluntary nature guidance
The International Sustainability Standards Board (ISSB) has unanimously agreed to launch a consultation on upcoming draft guidance covering nature-related disclosures that go beyond its existing IFRS S1 and S2 standards.
The board agreed in April not to develop a dedicated nature standard, opting instead for a voluntary practice statement, with a draft due in October 2026. The consultation period will run for 120 days.
This page was last updated August 19, 2026
Written by
Ike Walker, a Green Central Banking contributor since 2023, has a decade's experience in research writing. An Utrecht-based scholar, Ingrid specialises in transformative justice, green finance, law and systems change. They are an Utrecht University's Bright Minds scholar and previously worked for Cambridge University and various justice-based NGOs.
