Fourthly, the setting-up of euro area statistics from scratch has required an intensive process of harmonisation of the methodologies used by the various countries for the collection and production of statistics. This enables us, for example, to compile meaningful area-wide aggregates. The need for the harmonisation of statistical concepts also applies at an international level. The application of the international standards is, first of all, a way to ensure that the statistics remain independent of the policy users. Secondly, application of the international standards allows for meaningful comparisons and aggregation. Given that cross-country comparability of official statistics is key to their usefulness and credibility, all countries across the globe should want to implement worldwide standards in their statistics. Take, for example, balance of payments statistics. Countries will only be able to achieve a common analysis of their bilateral economic and financial relationships if their mutual external statistics mirror each other. A recent study by the ECB comparing the mirror data for direct investment between the euro area, the UK, the US and Japan shows that, in all cases, sizeable asymmetries in these data still exist. Eliminating these asymmetries requires not only an adherence to international standards, but also good worldwide cooperation between the statisticians involved and probably an exchange of micro-data for statistical purposes. Finally, perhaps the most important lesson of all, the independence of statistical institutes is key to the quality and integrity of the underlying statistics. Recent incidents involving government finance statistics have demonstrated this very clearly.

There remain significant challenges in tracing how nature loss transmits to the economy and financial sector. Knowledge, data, methods, and models in this area are still largely evolving, even compared to that of climate risks. This report is therefore exploratory, and is meant to contribute towards building a deeper understanding of risks and opportunities in this complex and intricate area. We remain some way from being in a position to develop more explicit supervisory and regulatory expectations – but we believe this work makes an important contribution to our thinking and approach to managing climate and nature-related risks in a coherent manner. Importantly, the financial sector needs to come to grips with the reality that like climate, nature-related risks are already presenting a significant threat to our economies and society that can no longer be ignored. The findings of this report lend impetus to the need to strengthen capacity in this area. The scientific community continues to issue the ‘code red for humanity,’ and with recent events, including the pandemic, floods and bushfires, the message could not be clearer. Ecosystem and planetary health matters to economic and financial stability. While the primary responsibility for addressing these priorities rests with governments, the financial industry and authorities have a critical interest in deepening our understanding and appreciation of the interactions between climate and nature-related risks – because how these risks evolve both affect and are affected by the actions of financial institutions.