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.

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