6.3 C
London
Saturday, December 3, 2022
HomeNewsECB unveils plan to push climate-friendly investments

ECB unveils plan to push climate-friendly investments

Date:

Related stories

CULBEAT Foundation Brings Charity To Ekiti, Offers Free Medical Consultation

The CULBEAT Foundation in partnership with NOVA International High...

Orji Kalu Reveals When US Will Receive Tinubu

Nigerian politician, Senator Orji Uzor Kalu has denied rumors...

2023: Northern Leaders Back Atiku

The Peoples Democratic Party, PDP, presidential candidate, Atiku Abubakar,...

Crisis Looms As Labour Party State Faction Expels Doyin Okupe

Okupe: They Have Collected Money From APC – Crisis...

Nigerians Besiege Peter Obi as He Arrives Atlanta

The former Anambra state governor landed at the Hartsfield-Jackson...
spot_imgspot_img

The European Central Bank on Monday unveiled plans to integrate climate change into its monetary policy in a bid to encourage eurozone businesses to pay more attention to their environmental impact.

The steps by the ECB’s governing council “aim to better take into account climate-related financial risk” and “support the green transition of the economy in line with the EU’s climate neutrality objectives”, the central bank said in a statement.

Under the new plans, the ECB will aim to “gradually decarbonise corporate bond holdings” from October 2022, shifting them towards issuers with better climate performance.

This will be measured through indicators such as lower greenhouse gas emissions, more ambitious carbon reduction targets and better climate-related disclosures, the ECB said.

The ECB’s portfolio of asset purchases worth around 350 billion euros ($365 billion) is currently heavily weighted towards big polluters.

The central bank will aim to “tilt these holdings towards issuers with better climate performance” as it reinvests around 30 billion euros a year.

The aim is to “give companies more incentives to reduce their emissions”, Isabel Schnabel, a member of the ECB’s executive board, told a press briefing.

However, “no company will be entirely excluded from the portfolio”, she added.

By the end of 2024, there will also be limits on the share of assets issued by entities with a high carbon footprint that can be pledged as collateral by individual counterparties when borrowing from central banks.

At first, banks will apply such limits only to marketable debt instruments issued by companies outside the financial sector, the ECB said.

Assets will also have to comply with the Sustainability Reporting Directive (SRD).

However, the implementation of the SRD, which is set to apply to around 50,000 companies in the EU, has been delayed, with eligibility criteria not kicking in until 2026.

The concept of “green” ECB loans to banks to finance sustainable projects, championed by President Christine Lagarde, remains absent from the catalogue of new measures.

Subscribe

- Never miss a story with notifications

- Gain full access to our premium content

- Browse free from up to 5 devices at once

Latest stories

spot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here