In its annual resolution, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) calls on the European Central Bank (ECB) to incorporate environmental criteria into its policies. With quasi unanimous support from all political groups, the report shows unprecedented support towards a green ECB.

Climate change is probably the biggest challenge our society is facing right now. Positive Money Europe thinks the planet cannot afford to wait for the private sector to catch up with the necessity of tackling climate change. The public sector needs to step up to pioneer the investment needed in greening the economy. Central banks are no exception to that. Positive Money Europe’s goal is to make sure that the ECB and national central banks in the Eurozone adjust their policies to the EU’s environmental commitments.

So far, our campaign has been quite successful in rallying support from the European Parliament. In February 2018, the European Parliament adopted a report which recalls that the ECB is bound by the Paris agreement, and later in May the Parliament also adopted a report on sustainable finance pushing the ECB to “explicitly take into account the Paris Agreement and ESG goals in its guidelines orienting its purchase programmes”.

This week, the European Parliament has shown an even bigger level of support for our approach, after the Committee on Economic and Monetary Affairs (ECON) adopted almost unanimously its annual report on the European Central Bank. Led by right-wing MEP Gabriel Mato, the report which was adopted on 27th November 2018, includes a section on sustainability which reads:

“[The European Parliament] recalls that the ECB as an EU Institution is bound by the Paris agreement; invites the ECB, in full respect of its mandate, its independence, and the risk management framework, to integrate the commitment of the Paris agreement and economic, social and governance (ESG) principles into its policies.”

The report [1] was ultimately adopted by an overwhelming majority of 39 MEPs from all sides. Only 2 MEPs voted against and 2 abstained. The final report will be adopted in a plenary session in mid-January.

The report also includes a number of recommendations such as reviewing the role of the ECB in the Troika, more transparency on asset purchases programmes (in particular SMP, ABSPP and CBPP3), a reform of the emergency liquidity assistance (ELA) scheme, a review of ECON’s monetary dialogue, and improvements in the appointments procedures for ECB board members.

Following the vote, Head of Positive Money Europe Stanislas Jourdan said:

“The adoption of this draft report is a major and unprecedented accomplishment towards a green ECB. It shows there is an overwhelming cross-party majority in favour of aligning the ECB’s monetary policy with the EU’s climate change objectives.”

 

“The ECB’s efforts to make itself climate-proof are only nascent and long-overdue. So far the ECB has not announced any concrete policy change, despite evidence that its corporate bond purchases are massively skewed towards carbon intensive bonds. The European Parliament is therefore right to support and push the ECB to go further in this direction.”

Signs of progress from central banks are multiplying. Earlier this month ECB board member Benoit Coeuré also made a key speech highlighting the possible role of the ECB for climate change. On Monday 27 November, ECB President Mario Draghi referenced the ECB’s progress on sustainability matters. In response to Green MEP Philippe Lamberts, Draghi said that “this discussion has started in the ECB’s governing council and it is my intention to continue it.”

NOTES

1. The final version of the ECON report will be made available on the EP website.

 

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