As part of its climate and nature plan 2024-2025, the European Central Bank (ECB) announced on Tuesday 30 January that it will be stepping up its work on nature and climate change, identifying three main areas.
Firstly, the ECB will extend its work on the consequences of climate change on the economy, in particular, the transition costs and investment needs that these phenomena entail. The ECB announces that it will also study, within the framework of its mandate, “the case for further changes to its monetary policy instruments and portfolios in view of this transition”.
Secondly, the ECB will focus its efforts on the growing physical impact of climate change on the economy and the financial sector. It will also be looking more closely at the effects of measures to adapt to rising temperatures, the cost of not adapting, the investment needed for the transition and the shortfall in insurance protection.
Finally, the ECB intends to focus on the risks arising from the degradation of nature and the loss of nature and biodiversity, the impact of this degradation on the economy and the financial system and, consequently, on its own work. This last point had already been the subject of work by the ECB (see EUROPE 13294/26, 13316/17).
In addition, the institution will be launching work on its own operations and will be launching its eighth environmental management programme to support the achievement of its 2030 CO2 emissions reduction targets.
The ECB notes that, without prejudice to its primary objective of price stability, it must support the general economic policies of the EU with a view to contributing to a high level of environmental protection.
In addition, following the review of its strategy in 2021, the ECB introduced elements relating to climate change into its monetary policy framework.
Link to the roadmap: https://aeur.eu/f/amj (Original version in French by Émilie Vanderhulst)