The High-level Expert Group’s consultation on its sustainable finance report provides an important opportunity for citizens and organisations to urge the group to explore the possible role of the European Central Bank in the fight against climate change.

The report of the High-Level Expert group (HLEG) on sustainable finance outlines the scale of the problem that climate change brings and lists a number of strong recommendations to tackle it. However, missing from the report is any mention of the ECB as a driving force behind developing environmentally-friendly monetary policies.

As we have seen during the financial crisis, central banking and monetary policy play a decisive role in maintaining the stability of the financial system. This stability is in jeopardy if no action is taken against climate change.

Furthermore, the EU’s efforts to divert from climate-damaging investments are being undermined by the ECB’s corporate bond purchases under which the ECB buys bonds from large fossil fuel industry companies. Earlier this year, a group of 70 NGOs sent a joint letter to the ECB highlighting this issue.

We argue for the report to bear any weight, it must outline how the ECB can revise its approach to financial risks and take into account climate risks through macroprudential policy.

QE4People’s campaigner, Stanislas Jourdan says:

The corporate bond purchase programme clearly shows how little the ECB cares about climate change and sustainability goals. If public regulators such as central banks are not exemplary in this domain, can we realistically expect the whole industry to shift its attitude? If the HLEG report is really serious about pushing for radical change, all options must be on the table, including monetary policy.

In our response to the HLEG consultation, we propose the three main models the ECB could adopt:

  • Green macroprudential framework helping to reduce carbon emissions and maintain financial stability
  • Green targeted refinancing lines providing an incentive for banks to lend more to the green sector
  • Green Quantitative easing to increase public funding towards green infrastructure investments and other green initiatives

We are not alone in arguing the importance of central banks in the fight against climate change. The UN’s Environment Programme has published a report that expands on the proposals we have raised saying:

Monetary and financial authorities can impact investment decisions and the creation and allocation of credit through monetary as well as micro – and macroprudential policies

The QE4People campaign invites all civil society stakeholders to join our fight to make sure the HLEG report touches upon the role of monetary policy in fostering green finance. The consultation is open until September 20th. All responses will be taken into account by the expert group and will inform the preparation of its final report due for the end of the year.

Note: This article was originally published on the QE for People campaign website. As we are gradually phasing out the QE for People campaign, we are archiving this publication here. For more information, read the history of Positive Money Europe.

Picture CC Pixaby


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