Climate action

  • The ECB has created a climate centre to shape and steer the Bank's climate agenda.
  • The ECB is conducting the first Europe-wide climate-related stress tests.
  • The ECB has pledged to increase its green bond purchases.
  • Lagarde demonstrated good practice in the ECB's contribution to the Eurosystem regulations under discussion.

Climate inaction

  • ECB’ s corporate Quantitative Easing programmes, especially those associated with the COVID-19 response, are disproportionately enabling fossil fuel and high-carbon companies according to many studies.
  • Long term refinancing operations are considered as climate blind, therefore undermining the European Green Deal
  • ECB is lagging behind the Bank of England.
  • The ECB is expected to disclose its climate risk and lacks a plan to address it.

How the European Central Bank stacks up

Rank Country Aggregate Score (out of 130) Grade (A+ to F) Research and Advocacy (out of 10) Monetary Policy (out of 50) Financial Policy (out of 50) Leading by Example (out of 20)
5 European UnionEuropean Union 33 D+ 10 2 15 6

Central Bank/Supervisor

European Central Bank and European Banking Authority

More info


Research & Advocacy

10 out of 10

High-impact

  • N/A

Medium-impact

  • ECB and EBA are members of the NGFS

Low-impact

Monetary Policy

2 out of 50

High-impact

  • N/A

Medium-impact

  • Incorporating cimate considerations into corporate bond purchase programme (under discussion)

Low-impact

Financial Policy

15 out of 50

High-impact

  • N/A

Medium-impact

  • Mandatory disclosure of sustainability risks

  • Banks are required to integrate climate and environmental risks into risk management practices

  • 2022 climate stress test will focus on climate-related risks (formal commitment)

  • Differential prudential treatment of exposures related to environmental objectives (under discussion at EBA – required by CRR)

Low-impact

  • EBA launched a consultation to incorporate ESG risks into the governance, risk management and supervision of credit institutions and investment firms

Leading by Example

6 out of 20

High-impact

  • N/A

Medium-impact

  • N/A

Low-impact

  • Contributed to development of the EU taxonomy

  • Runs ECB Listens event which allows civil society to raise environment-related questions

  • Sustainable and responsible investment practices in the management of their non-monetary portfolios (referred to here).

  • Annual environmental statement

  • Contribution to the IMF’s green bond fund

  • Establishment of a climate change centre

  • Climate stress test of Eurosystem balance sheet (under discussion – referred in our bilateral interactions)

  • Disclosure of own climate risks (formal commitment)

What steps are missing in the European Central Bank toolbox to address climate risk?

Civil society expects the bank to do the following:

  • Align its asset purchasing programmes and collateral frameworks with the Paris Climate Agreement, to support the low carbon transition.
  • Align its refinancing operations (TLTROs) to the banking sector with the Paris Agreement to help boost sustainable bank lending and fill the green investment gap.
  • Support asset markets for sustainable investment and coordinate operations with the European Investment Bank (or other equivalent European institutions) to ramp up green investment and lock-in a low carbon future.
  • Implement prudential measures to increase the resilience of the European banking sector to climate risks and reduce dirty financial flows (e.g. financing of fossil fuels)
  • Lead by example on climate disclosures and transparency by assessing and regularly communicating to elected officials alignment of its operations with the Paris Agreement and that of the European Banking sector.