European Central Bank to incorporate climate change into monetary policy operations
By Nneka Nwogwugwu
The Governing Council of the European Central Bank (ECB) has decided to take further steps to include climate change considerations in the Eurosystem’s monetary policy framework.
It decided to adjust corporate bond holdings in the Eurosystem’s monetary policy portfolios and its collateral framework, to introduce climate-related disclosure requirements and enhance its risk management practices.
This announcement was made on the Bank’s website on Monday.
The measures are designed in full accordance with the Eurosystem’s primary objective of maintaining price stability. They aim to better take into account climate-related financial risk in the Eurosystem balance sheet and, concerning our secondary objective, support the green transition of the economy in line with the EU’s climate neutrality objectives.
“Moreover, our measures provide incentives to companies and financial institutions to be more transparent about their carbon emissions and to reduce them.
“With these decisions, we are turning our commitment to fighting climate change into real action”, says ECB President Christine Lagarde.
