The European Parliament called on the European Central Bank (ECB) to put climate change at the centre of its upcoming strategy and policy review.
A large majority of MEPs from across the political spectrum voted in favour of the resolution, recommending that the ECB examine ways in which it can help move the economy away from carbon and mitigate the climate crisis.
The resolution notes the ECB’s mandate and independence, and acknowledges that central bank action cannot be a substitute for political action. However, it also states that the ECB is “bound by the Paris Agreement” and that the accord “should be reflected in its policies”.
In addition, it calls for the ECB to “make the question of how central banking and bank supervision can contribute to a sustainable economy and the fight against climate change one of its research priorities.”
The ECB has also been asked to study the impact of its asset purchases on climate change as a preliminary step towards “redesigning the corporate sector purchase programme in a socially and environmentally sustainable manner.” This addresses concerns about an existing bias towards carbon-intensive sectors in the ECB’s asset purchase programme.
The move follows the ECB’s announcement of a major strategic policy review to take place this year. Initiated by ECB President Christine Lagarde, the review is the first since 2003 and the first to include climate change as one of its work streams.
Lagarde has been outspoken on the need for the ECB to integrate climate-related risk into its operations and to contribute towards EU efforts to reduce greenhouse gas emissions, in line with the Intergovernmental Panel on Climate Change’s pathway to the Paris Agreement target of containing global heating to 1.5C.
While the European Parliament’s resolution carries no legal weight, it is a strong political signal from the European Union’s only directly-elected governing body.
This page was last updated April 23, 2021
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