The European Central Bank (ECB) is poised to establish a dedicated climate change center aimed at consolidating its various initiatives related to this pressing issue.
This new unit will be composed of approximately ten staff members who will collaborate with existing teams throughout the bank. It will operate under the oversight of President Christine Lagarde, who is responsible for guiding the ECB’s climate change and sustainable finance efforts. Lagarde stresses the pervasive impact of climate change across all areas of the bank’s policies: “The climate change center provides the structure we need to tackle the issue with the urgency and determination that it deserves.”
The center will play a pivotal role in shaping the ECB’s climate agenda, both internally and externally, leveraging the expertise of teams already engaged with climate-related matters. Its initiatives will encompass various workstreams, including monetary policy and prudential functions, supported by a staff equipped with specialized data and climate change knowledge.
Lagarde has indicated that the structure will undergo a review after three years, with the goal of fully integrating climate considerations into the ECB’s routine operations.
In a related development, the Bank of England is facing criticism from Members of Parliament for channeling COVID-19 relief funds to carbon-intensive companies without imposing any environmental conditions. Philip Dunne, chair of the Environmental Audit Committee (EAC), has called for the Bank to take a leadership role in climate efforts, urging it to align its corporate bond purchasing program with the objectives of the Paris Agreement and to require transparency from companies receiving significant taxpayer funding regarding their climate-related financial disclosures.
The pressure group Positive Money has reported that, as of June last year, a notable 56% of COVID funding had been directed to high-carbon sectors. As the UK prepares to host the global COP26 summit in Glasgow this November, there are calls for the Bank of England to take a proactive stance in combating climate change.