Environment

ECB to factor climate change more into policy

2 minute read

European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany, March 7, 2018. REUTERS/Ralph Orlowski

FRANKFURT, July 8 (Reuters) - The European Central Bank said on Thursday it would further incorporate climate change considerations into its monetary policy, including on disclosure, risk assessment, and decisions on collateral and corporate sector asset purchases.

"Looking ahead, the ECB will adjust the framework guiding the allocation of corporate bond purchases to incorporate climate change criteria, in line with its mandate," it said, as it announced the results of a long-awaited strategic review.

"These will include the alignment of issuers with, at a minimum, EU legislation implementing the Paris agreement through climate change-related metrics or commitments of the issuers to such goals," the statement added.

The move is the latest in a series of steps by the world's top central banks to acknowledge their policy must take account of climate change, although some like the U.S. Federal Reserve insist that actually tackling it is the preserve of governments.

ECB already buys green bonds and holds around a fifth of the green assets that meet its eligibility criteria, which has already prompted a surge in issuance.

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Reporting by Balazs Koranyi; Editing by Mark John and Catherine Evans

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