Central Bank President Christine Lagarde called this year’s hot summer a warning that the continent must boost defenses against the financial fallout of global warming and make its energy system more flexible.

While the economic hit from the heat waves, droughts and wildfires was limited, “the costs of climate change are rising and future shocks may be harder to absorb,” Lagarde said Wednesday in a blog post on the ECB’s website.

“Extreme heat will return more often and with greater force, and its costs will fall hardest on those least able to bear them,” she said. “Europe has the means to limit the damage, and we owe it to the generations who will live with these summers to use those means now.”Her comments precede this month’s United Nations COP31 climate summit in Ankara. European Union climate chief Wopke Hoekstra has said talks on new financial pledges are “dead in the water” after two years of stalled progress to cut emissions.

Lagarde said last week that she’ll leave the ECB February, about nine months early, to be able to speak out on topics beyond monetary policy. As president, she managed to ensure climate change became inherent to ECB analysis and banking supervision, but early ambitions to use policy tools more aggressively were scaled back.

As nearly three-quarters of euro-area firms rely on one or more service provided by nature, Lagarde’s post warned that estimates of near-term economic costs understate risks as the climate warms. Activity in affected regions is 1.5% lower two years after a heat wave and 3% lower four years after a drought, she said. Lagarde highlighted three priorities for Europe to address both the direct hit and the energy channel.