The outcome of the review was not expected before September 2021 but ECB council members conducted several meetings in recent weeks to reach a consensus (2). Despite its claimed intention and attempt to “listen” to and consult European citizens (3), the ECB failed to hear the call of the 170 000 Europeans urging the bank to stop supporting polluters (4).
Conservative council members, such Bundesbank Governor Jens Weidmann (5), promoted low ambition measures centered on disclosure and ratings and opposed the review of the “market neutrality” principle. These measures – as well as consensual work on modelling and data for risk analysis – make up a large part of the ECB’s climate strategy.
In fact, climate integration proposals focus on climate-related risks and sideline the need to align with EU climate goals. Only two measures do not strictly concern building data and knowledge or integrating climate-risks: the adjustment of corporate bond purchases and the use of disclosure requirements in asset purchases and the collateral framework (a summary and analysis of ECB proposals is available in the table at the end of this press release).
Paul Schreiber, campaigner at Reclaim Finance, analyses:
“While the ECB overcame the hawkish opposition to climate integration in the Covid-19 context (6), the bank continues to turn a blind eye to its mandate that requires it to contribute to EU objectives. In doing so, the ECB is also scorning the calls of tens of thousands of Europeans that want the central bank to work in favor of the climate instead of the polluters. By centering its its climate strategy solely on the integration of climate risks, the ECB is doing the private financial players a favor. The only way to effectively reduce ECB’s support to polluting activities is to decarbonize its operations. But even there the ECB falls short: its proposal does not apply to its collateral framework, it is too vague to ensure the end of support to big polluters and will not be implemented before 2023. Likewise, the ECB makes no propositions to help the EU achieve its climate goals (7).”
“By deferring the review of its market neutrality doctrine (8), the ECB makes an unexpected U-turn, thus contradicting its own board members and disregarding the work of researchers and NGOs.Everybody thought the debate was over: market neutrality causes a dangerous carbon bias and must be immediately reviewed.”
The ECB climate change center (9) will coordinate the gradual implementation of the climate measures from 2021 to 2024 but no measures will be in place before mid-2022 (10). The ECB has announced periodic assessments of its strategy, the first one being scheduled 2025 (11).
The bank also stresses that implementation will depend on and align with EU policies and initiatives on sustainability disclosure, reporting and the EU sustainable taxonomy.
Paul Schreiber, campaigner at Reclaim Finance, stresses:
“One thing is very clear with this new strategy: the ECB postpones climate integration and will continue to support polluters until 2023 at the very least. Several climate measures could easily be further postponed as they rely on progress at the EU or company level.”
“Given the weakness of the recently announced sustainable finance strategy (12) and the EU green finance taxonomy opening the door to harmful activities such as fossil gas (13), it is especially worrying to see that the ECB wants to base its climate ambitions on these very low common denominators.”