Just hours after climate activists staged a protest in front of its headquarters in Frankfurt asking it to use its powers to end all support to polluters, the European Central Bank (ECB) decided to significantly scale up its Covid stimulus package without any climate or environmental criteria. By doing so, the ECB continues to support the most polluting companies and to ignore the demands of citizens and NGOs, undermining its promise to study “every avenue” to fight climate change.
Today, the European Central Bank (ECB) significantly scaled up its Covid-stimulus package by taking three main measures:
- Announcing an additional €500 billion increase in Covid-related asset purchases (via its Pandemic Emergency Purchase Program or PEPP).
- Extending the period during which its long term refinancing operations (TLTRO III) allow banks to get financed under considerably more favorable terms and will conduct additional refinancing operations in 2021.
- Extending the lowering of the banks’ collateral requirements to June 2022.
Activists from the Koala Kollektiv took action outside the ECB headquarters to demand the bank put people not polluters first just hours before this decision was taken. Activists echo the voices of more than 165,000 Europeans but climate impacts are not considered in any of the measures announced by the ECB today.
Leyla Larbi, Senior Campaigner at SumOfUs, said: “The ECB is missing a once in a generation opportunity to use this gigantic stimulus package to build back our economies for the better. It could set strict environmental criteria to decide which companies to invest in, helping to spur a green recovery. Instead, it is buying up shares in Shell and Total, both of which plan to increase their fossil fuel extraction over the next decade – further accelerating the destruction of our planet.“
Kerstin Kreß, spokesperson for the Koala Kollektiv said: “Right now, the ECB has the historic opportunity to help solve two crises at once: by adopting climate protection conditions for quantitative easing, the ECB will be able to effectively fight the economic impact of the pandemic as well as the global impact of the climate crisis. The point is to urgently avoid humanitarian catastrophes now and in the future, either caused by Covid or the Climate Crisis. The ECB must ensure effective climate protection policies and the transition to a just recovery.”
In the absence of any climate requirement, the ECB’s new measures will contribute to the climate crisis:
- ECB’s new purchases could channel billions of euros to the world’s worst polluters.
- Contrary to the recommendations of NGOs and researchers, the ECB did not consider using its long term refinancing operations to help fund a green recovery, nor banning banks for depositing the assets of highly polluting companies as collateral when benefiting from these operations.
- In the absence of any climate requirement, the extension of collateral easing measures could further lower financial institutions’ resilience to climate-related risks and shocks.
Paul Schreiber, campaigner at Reclaim Finance said: “By scaling up its Covid response, the ECB will buy a total €1970 billion worth of assets from March 2020 to March 2022. Providing the well-documented carbon bias of ECB’s corporate asset purchases, up to €294 billion of these purchases could be used to buy assets from high-carbon companies, including 38 fossil fuel companies involved in many new oil and gas projects. The ECB will also continue to pump trillions of euros of liquidity into the economy through its long-term refinancing operations, without even trying to use it to channel it away from polluting activities and toward SMEs and sustainable activities.”
The ECB President, Christine Lagarde, had previously pledged to explore “every avenue” to fight climate change and ECB Board members and Governors, such as Isabelle Schnabel or François Villeroy de Galhau, underlined the importance of integrating climate in monetary and prudential policy.
Nick Bryer, campaigner at 350.org said: “We hear over and over again that decision-makers at the European Central Bank, like Christine Lagarde, want to show leadership on climate but to do this they must end the bank’s ongoing, large-scale support for oil corporations and their destructive fossil fuel projects around the world. This week marks the five year anniversary of the signing of the global Paris Agreement on climate. The EU will be announcing stronger emissions targets to better align with the region’s commitment to limit global heating to no more than 1.5℃. At the same time, the European Central Bank is announcing billions more in support for corporations like Total and Shell, companies that are investing hundreds of millions into devastating projects around the world, like fracking in Argentina or new oil pipelines in Uganda.”
(EN) Mark Raven, Europe Communications at 350.org, email@example.com
(EN) Jon Date, Communications on behalf of SumOfUs, firstname.lastname@example.org
(FR/EN) Paul Schreiber, Campaigner at Reclaim Finance, email@example.com
Notes to editor