{"id":22744,"date":"2022-09-21T00:01:46","date_gmt":"2022-09-20T22:01:46","guid":{"rendered":"https:\/\/reclaimfinance.org\/site\/?page_id=22744"},"modified":"2025-03-14T17:33:44","modified_gmt":"2025-03-14T16:33:44","slug":"managing-inflation-by-supercharging-a-clean-energy-transition-what-the-ecb-should-do","status":"publish","type":"page","link":"https:\/\/reclaimfinance.org\/site\/en\/managing-inflation-by-supercharging-a-clean-energy-transition-what-the-ecb-should-do\/","title":{"rendered":"Managing inflation by supercharging a clean energy transition & What the ECB should do"},"content":{"rendered":"

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CHARTING THE PATH FOR GREEN CENTRAL BANKING<\/h1><\/span>
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CENTRAL BANKS\u2019 ROLE IN PROTECTING THE ENVIRONMENT<\/h2><\/span>
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With an additional \u20ac620 billion a year needing to be spent in Europe until 2030 to reach climate targets, all financial institutions should be reflecting on what they can do to support this goal. As key players in the financial sector, central banks also have a role to play. When regulating the money supply and overseeing banks\u2019 activities, they impact purchasing power, debt, and financial stability. <\/p>\n

Central banks must play their part in greening the financial sector. Not simply because they have a moral responsibility to do so, but because they are required to do so by their mandates. Indeed, climate change and fossil fuel dependence significantly impact price stability. <\/p>\n<\/div>

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CLIMATE CHANGE AND THE EUROPEAN CENTRAL BANK<\/h2><\/span>
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The European Central Bank (ECB) works with the 20 national central banks of the Eurosystem to ensure price stability. The ECB also needs to support the European Union\u2019s (EU) policies, including its climate goals, as long as it doesn\u2019t interfere with price stability. <\/p>\n

In 2021, the ECB adopted its first climate-related measures. However, it is yet to align all of its operations with EU climate goals. To do so, it must both end support for companies at odds with the transition \u2013 notably by excluding fossil fuel developers from its collateral and asset purchases \u2013 and implement measures to contribute to the bloc’s transition by incentivizing green investments. <\/p>\n<\/div><\/div><\/div><\/div><\/div>

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STOP SUPPORTING BIG POLLUTERS<\/h2><\/span>
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The ECB currently supports high emitting companies, including fossil fuel developers, through various channels. This is notably because of the prevailing focus on short-term financial risks over climate impact and overlooking negative consequences of economic activities. <\/p>\n<\/div><\/div><\/div>