© Christian Lue
A draft resolution from the EU parliament says climate change is political and reminds the European Central Bank (ECB) that its main objective is to focus on price stability, not environmental issues.
The report, which has yet to be voted on, reflects a changing political environment in the EU in which climate change has taken a backseat to other issues like defence spending and competition.
While the EU parliament’s annual resolution to the ECB is not legally binding, it sets up dialogue between the two institutions and signals what Brussels wants the central bank to work on in the coming year.
“The intention is quite clear from the rapporteur that they really are trying to basically stop the climate agenda of the European Central Bank,” said Clarisse Murphy, central banks campaigner at Reclaim Finance.
The resolution, drafted by Belgian MEP Johan Van Overtveldt, calls into question the ECB’s primary and secondary objectives. Like most central banks, the ECB’s primary mandate is to keep inflation and unemployment low. But it also has a secondary role of expanding the objectives of the EU, such as on climate issues, when its first mandate allows it to.
The language is very similar to what US president Donald Trump and the Federal Reserve have used about the central banks role regarding climate issues, said Murphy. It “shows a huge gap between [Van Overtveldt] and a number of MEPs and the reality of climate change and also the reality of what central bankers around the world are saying”.
But this isn’t the first year that the draft report is against climate change, said Murphy. What’s worrying is that often the ECB seems to be the most progressive body in the room, she said.
“I think what’s becoming harder and harder is that the opposition are struggling to change the language from the propositions made by the extreme right and the right.”
ECB’s green measures
The ECB has taken several steps in the past year towards mitigating the financial sector from climate risk. It fined a bank for failing to identify its climate risks, and added climate to its collateral framework.
ECB president Christine Lagarde has said climate falls within the central bank’s primary mandate of price stability, a view supported by other economists. The Network for Greening the Financial System, a group of 148 central banks, issued a declaration in November highlighting the economic costs of climate inaction, while several research reports have found that extreme weather is causing spikes in food prices.
“Saying that climate change does not impact prices and is not within the ECB’s mandate just doesn’t match the consensus of central bankers around the world, but also the reality of what we’re living in terms of inflation,” said Murphy.
Laura Casonato, head of policy at Positive Money Europe, says climate change is a core economic and financial risk, which is “under the ECB main mandate of price stability, and moreover, under the secondary mandate, as the ECB is legally bound to support the EU’s economic objectives, including sustainable development and environmental protection”.
The report also misinterprets the meaning of central bank independence, she said.
“ECB independence means that it’s entitled to take any action it deems necessary, while maintaining proportionality, transparency and accountability,” she said.
But that doesn’t mean it can’t be accountable as it’s still a democratic institution and the ECB and EU parliament should have more open communication, Casonato added.
The draft report also calls on the ECB to review inflation targets, a sentiment that Casonato says she agrees with but that goes in the wrong direction, as it fails to recognise the main causes of inflation, namely geopolitical uncertainty and energy dependency.
“We believe that the ECB should regularly review its inflation targets, but with a team to ensure that its definition of price stability reflects the real economic conditions of businesses and households,” she said.
The report is currently being discussed in the economic and monetary affairs committee and a vote is expected on 15 January before a final vote in plenary in February.
This page was last updated December 15, 2025
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
