Paris, 29 July 2025 \u2013 The European Central Bank has today announced measures to integrate climate considerations into its collateral framework (1) to address its support to carbon intensive companies. Reclaim Finance welcomes the announcement and calls for strong criteria to penalize assets linked to environmentally destructive activities, such as developing new fossil fuel projects.<\/p>\n<\/div>
The European Central Bank (ECB) has announced it will include climate criteria when considering which assets are eligible as guarantees for banks seeking refinancing from mid-2026. For each asset used as collateral, the ECB will add a \u201cclimate factor\u201d to its current framework, considering not just the asset itself, but also the company and the sector (2).<\/p>\n
The integration of climate considerations into the collateral framework has been a long time coming with a set of measures originally announced in 2022 which were later abandoned (3).<\/p>\n<\/div><\/div><\/div>
The European Central Bank\u2019s decision to finally act on its collateral framework sends a powerful message: carbon-intensive assets, like fossil fuels, are less reliable guarantees. The proposals must be implemented in such a way as to disincentivize the use of climate destructive assets as collateral. This means careful design to ensure the desired effect.<\/p>\n<\/div>
Clarisse Murphy, Central Bank Campaigner at Reclaim Finance<\/p>\n<\/div><\/div><\/div>
Reclaim Finance stresses that the ECB should ensure the \u201cclimate factor\u201d significantly lowers the value of all carbon intensive assets, especially fossil fuel assets, regardless of their maturity (4). The ECB should also carefully consider which climate-related metrics they want to use at the company level to avoid distortions as were seen in the Corporate Sector Purchase Program (CSPP) climate score. It should notably avoid an over-reliance on carbon intensity and a \u201cbest-in-class\u00a0\u00bb approach that does not address the need to reduce support to high carbon sectors (5).<\/p>\n
Reclaim Finance therefore welcomes these long-awaited measures but urges the ECB to ensure that all assets issued by companies still developing new fossil projects are strongly penalized.<\/p>\n<\/div><\/div><\/div>