Sunday, January 16 2022

The European Central Bank’s (ECB’s) new monetary policy is a positive step, but it needs more ambition to tackle its climate problem, warns a group of EU lawmakers, environmental activists and economists.

The following opinion piece is signed by European Parliament lawmakers, NGOs and economists, and coordinated by Marie Toussant, MEP (full list below).

Scientists warn us again and again: climate change is accelerating. The IPCC’s preliminary findings sound the alarm bells on the extremely worrying state of our climate, stressing that humanity is currently not equipped to cope with the growing consequences of rising global temperatures. If this is true of society, it is also true of the financial system.

According to a study recently published by several NGOs, the 11 largest European banks hold more than 530 billion euros in assets linked to fossil fuels (coal, oil and gas). 530 billion euros represent around 95% of the equity of these banks. Rather than reducing their dependence on fossil fuels, EU banks actually increased their support to the sector between 2016 and 2020.

However, if we want to limit global warming to 1.5 ° C above pre-industrial levels, we must leave at least 80% of fossil fuels in the ground and reduce the production of fossil fuels by 6% per year. between 2020 and 2030.

The assets that banks accumulate by financing climate-destroying fossil fuels are both at odds with the energy transition and doomed to lose value as change accelerates. The threat posed by banks addicted to fossil fuels is real and could slow down the entire ecological transition.

The 2008 global financial crisis and the years of economic and social crisis that followed should have brought our economies to their senses. But the growing risks that fossil assets pose to European banks prove that we have not learned the lesson.

We limit ourselves to “soft touch” and non-binding regulation, even if financial institutions continue to prioritize profit at the expense of the planet and their own stability. The ECB gave a vivid example of this by acknowledging that 90% of banks are not aligned with its expectations on climate and environmental risks.

But the ECB itself has historically not set a good example. While he recognizes that climate change poses a systemic risk and that this risk is more acute for “banks whose portfolios are concentrated in certain economic sectors”, he has long supported fossil fuel companies through his purchases of assets and its collateral framework.

By sticking to an allegedis lying Neutral, the bank has contributed to the sustainability of investments in polluting activities, thus going against the climate objectives of the European Union and increasing the financial risks on its portfolios.

Against this backdrop, the ECB’s new monetary policy strategy released last week – the first in nearly two decades – is an unprecedented opportunity to right these wrongs and to acknowledge the concerns of more than 170,000 citizens who have called for the bank to take concrete action for the climate.

Indeed, the bank’s strategy sends a very positive signal. It recognizes the need to mainstream climate considerations into ECB policies and signals to all financial institutions that climate change can no longer be ignored.

However, so far, the package of proposals does little to address the bank’s climate problem: it does not remove support for companies whose activities are at odds with EU climate targets, nor does it address the level high risk associated with the assets it holds. , or propose measures that would help the EU to meet its climate targets.

In addition, the envisaged implementation schedule suggests that these measures will have little or no impact for several years, thus ignoring the urgency of the climate emergency.

We therefore call on the ECB to go beyond what has been established to date and take full advantage of the opportunity offered by its new strategy to ensure that the bank:

  • Immediately stop all direct or indirect support for companies that develop fossil fuels, in particular by excluding these companies from its framework for purchasing social assets and collateral;
  • Aligns its guarantee framework with the EU’s climate objectives, as it has committed to doing for its purchases of corporate assets;
  • Uses all of its operations to contribute – within its mandate – to the EU’s net zero transition, in particular by carrying out specific refinancing operations for the financing of activities with significant environmental benefits.
  • Sets high supervisory expectations and uses all of its regulatory powers to encourage banks to reduce their exposure to highly polluting activities like the production of fossil fuels.

For the ECB, focusing only on climate risks and delaying the implementation of mitigation measures could undermine its ability to fulfill its mission of price stability and ensure financial stability.

It would also completely ignore the EU treaties which oblige it to support the objectives of the European Union and leave it open to further legal challenges. A growing number of courts, including the Dutch and Belgian courts and the German Constitutional Court, have already ruled that inadequate state action on climate change violates obligations to protect the human rights and fundamental freedoms of citizens.

The ECB itself is the recipient of the European Charter of Fundamental Rights. It must respect its legal obligations and act now, which the new strategy is by no means sufficient to guarantee.




  • Marie Toussaint (The Greens)
  • Philippe Lamberts (Greens)
  • David Cormand (Greens)
  • Manuel Bompard (GUE)
  • Pierre Larrouturou (S&D)

Civil society and NGOs:

  • Nicolas Dufrêne, co-director of the Rousseau Institute
  • Johan Frijns, Director of Banktrack
  • Lucie Pinson, Director of Reclaim Finance and recipient of the Goldman Award
  • Leyla Larbi, Senior Campaigner at SumOfUs
  • Alban Grosdidier, Europe organizer at
  • Jamie Sawyer, Client Earth


  • Tim Jackson, Director of the Center for the Understanding of Sustainable Prosperity and Professor of Sustainable Development at the University of Surrey
  • Gaël Giraud, CNRS principal researcher in economics and founding director of the Georgetown Environmental Justice Program
  • Jézabel Couppey-Soubeyran, lecturer at the University of Paris 1 Panthéon-Sorbonne and scientific advisor at the Institut Veblen
  • Thomas Lagoarde Segot, Professor of economics and finance at Kedge Business School and coordinator of the sustainable finance sector for SDSN France
  • Jérôme Deyris, doctoral student specializing in financial stability and climate risk and associate researcher at the Paris Dauphine chair on climate economics and energy and prosperity
  • Christophe Revelli, Professor at Kedge Business School

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