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MEPs urge European Central Bank to step up green credentials

As 452 vote in favour of putting climate action at heart of the bank’s mandate

Members of the European Parliament have called on the ECB to better integrate environmental, social and governance (ESG) principles into its policies.

The group also urged the bank to redesign its corporate sector purchase programme (CSPP) to better support environmentally sustainable initiatives.

This is not the first time that central banks have been called upon to take the lead on battling climate change; with the Network for Greening the Financial System (NGFS) doing so in 2018.

More to be done

MEPs expressed concern that green bond issuance still only accounts for 1% of the overall supply of euro-denominated bonds, while 62.1% of ECB corporate bond purchases remain in sectors that are responsible for 58.5% of euro area greenhouse gas emissions.

The vote, held on 12 February, saw 452 MEPs from across the political and geographical spectrum vote in favour of the resolution – which was spearheaded by Cypriot politician Costas Mavrides.

There were 142 who opposed it, with 33 abstentions.

Made a priority

The resolution stated: “As an institution, the ECB is bound by the Paris Agreement on climate change and that this should be reflected in its policies.”

While “fully respecting its mandate and its independence”, the MEPs said they welcomed the “emergence of a discussion about the role of central banks and supervisors in supporting the fight against climate change”.

They suggested that the ECB “make the question of how central banking and bank supervision can contribute to a sustainable economy and the fight against climate change one of its research priorities”.

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