Fueling extinction: Why the ECB must act on the biodiversity risks of fossil fuels
The European Central Bank (ECB) recognizes that biodiversity loss and ecosystem breakdown have disastrous consequences for price and financial stability. But does this translate into concrete policies to protect biodiversity from the financial system? Reclaim Finance investigated whether the ECB monetary and supervisory policies enable the financing of 80 companies with fossil fuel activities (ongoing or planned) in some of the most ecologically important areas.
Key findings:
- Despite its commitment to integrating nature-related risks, the ECB is fueling biodiversity loss by enabling financing to several companies harming key ecosystems.
- Corporate monetary portfolios: One in 10 bonds in the ECB’s corporate monetary portfolios were tied to companies with fossil fuel activities in critical biodiversity areas as recently as May 2026.
- Collateral framework: Over the last 18 months, banks could pledge assets as collateral from at least 20 companies known to have fossil fuel activities in critical biodiversity areas.
- Banking supervision: Between 2021 and 2025, 33 major banks supervised by the ECB provided US$161 billion to 45 companies with fossil fuel facilities that threaten critical biodiversity areas.
If biodiversity loss and ecosystem collapse are of genuine concern to the ECB, it needs to update its approach to nature and end all support to fossil fuel-related companies which pose a serious threat to key ecosystems. This entails excluding companies with fossil fuel activities in critical biodiversity areas from its monetary policy tools, while also setting expectations for banks under its supervision to end support for these companies.