Climate action

  • The ECB has developed a climate roadmap.

  • The ECB has committed to incorporate climate considerations in its corporate sector purchase programme.

  • The ECB is conducting the first Europe-wide climate risk stress tests.

  • ECB policymakers have signalled the central bank will consider climate risk in its calculation of banks’ capital requirements.

Climate inaction

  • The ECB’s corporate sector asset purchases and collateral framework have been found to have a bias towards high-carbon companies.

  • The ECB’s refinancing operations are considered to be climate-blind, therefore undermining the EU’s climate goals.

  • The ECB has not given its support to adjusting Pillar 1 capital requirements to align financial flows with the green transition.

  • The ECB has not integrated climate risks into its own internal credit ratings.

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)
4 European UnionEuropean Union 47 C- 10 8 23 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

8 out of 50

High-impact

  • N/A

Medium-impact

  • Incorporation of climate change considerations into the collateral framework (formal commitment)

  • Incorporate climate considerations into the framework for corporate sector asset purchases (formal commitment)

Low-impact

  • ECB accepts sustainability-linked bonds as collateral

  • ECB will make environmental sustainability disclosures a condition of eligibility in collateral purchases (formal commitment)

  • ECB will make environmental sustainability disclosures a condition of eligibility in the corporate sector purchase programme (formal commitment)

  • ECB purchased green bonds under both the CSPP and the public sector purchase programme (PSPP)

Financial Policy

23 out of 50

High-impact

  • Climate-related quantitative and qualitative restrictions on banks’ portfolios (under discussion at ECB)

Medium-impact

  • Mandatory sustainability-related disclosure in the financial services sector

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

  • Economy-wide climate stress test (results available here)

  • Microprudential climate-related capital-based measures (under discussion at ECB and EBA)

  • Macroprudential climate-related capital-based measures (under discussion at ECB and EBA)

  • Requirement for banks to publish Paris-compatible transition plans (under discussion at ECB)

Low-impact

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

  • EBA ran a consultation on Pillar 3 disclosure of ESG risks

  • ECB ran a public consultation on its guide on climate and environmental risks

  • ECB will develop new statistical indicators to assess the carbon footprint of banks, as well as their exposures to climate-related physical risks (formal commitment)

  • ECB will review how credit ratings reflect climate risk (formal commitment)

Leading by Example

6 out of 20

High-impact

  • N/A

Medium-impact

  • N/A

Low-impact

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

Civil society expects the bank to do the following:

  • Replace ‘market neutrality’ with a new benchmark aligned with the EU environmental policies and commitments.

  • Fully decarbonise its collateral framework and asset purchases.

  • Adjust its refinancing operations in line with climate goals.

  • Integrate climate risks into its own internal credit ratings for collateral and asset purchases.

  • Support development and implementation of prudential measures to align financial flows with the 1.5°C targets of the Paris Agreement.