The European Central Bank (ECB) released on Monday (4) four measures to better account for climate change in the framework of monetary policies in the euro zone.
As announced, the decisions seek to reduce climate-related financial risks on the Eurosystem’s balance sheet, encourage transparency and support the economy’s green transition.
To decarbonize its corporate bonds, the ECB will increase its holdings in assets by issuers with better climate performance by reinvesting the “big” bailouts expected in the coming years.
Among the measures are also limiting the share of assets issued by entities with a high carbon footprint, which are initially non-financial; accept tradable assets and credit claims by companies and debtors that necessarily comply with the Corporate Sustainability Reporting Directive (CSRD); and finally, strengthen risk assessment tools to better include climate-related risks.
Such measures were designed in line with the Eurosystem’s primary objective of maintaining price stability in the euro area. In a note, ECB President Christine Lagarde said that “concrete steps” are being taken to incorporate climate change into monetary policy operations.
“And, as part of our development on the climate agenda, there will be more steps to align our activities with the goals of the Paris Agreement”, he said, referring to the world treaty for the reduction of global warming signed during COP21.
Source: CNN Brasil