European Central Bank’s failure to decarbonize its quantitative easing

The European Central Bank (ECB) introduced criteria on September 19, 2022, to decarbonize its corporate asset purchases starting October 1, but Reclaim Finance contends these measures are inadequate. The ECB's scoring grid, based on climate reporting and targets, allows for 'tilting' rather than exclusion, meaning fossil fuel developers and massive emitters can still be included in purchase programs. The document highlights a lack of transparency regarding Paris Agreement benchmarks and compares the ECB's approach to a similar, unsuccessful methodology used by the Bank of England in 2021. The author concludes that the ECB is prioritizing market neutrality over carbon neutrality and failing to align its actions with EU climate goals.

• The ECB's new methodology for corporate asset purchases lacks an exclusion mechanism, meaning fossil fuel developers and the worst polluters will remain eligible for purchase programs.
• The scoring system may allow massive emitters to achieve decent scores by blending indicators, such as reporting quality and sector-relative emissions, even if the companies lack meaningful decarbonization plans.
• The ECB has not disclosed the benchmarks used to assess whether company targets align with the Paris Agreement or the standards for disclosure, which may allow polluting companies to obtain higher scores.
• The ECB's approach is compared to the Bank of England's 2021 methodology, which also used a blended scoring grid and failed to reduce support for carbon-intensive companies.

APA

Martin, L. (2022). European Central Bank’s failure to decarbonize its quantitative easing. Reclaim Finance. https://reclaimfinance.org/site/en/2022/09/20/european-central-banks-failure-to-decarbonize-its-quantitative-easing/

Chicago

Martin, Léo. European Central Bank’s failure to decarbonize its quantitative easing. Reclaim Finance, 2022. https://reclaimfinance.org/site/en/2022/09/20/european-central-banks-failure-to-decarbonize-its-quantitative-easing/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=European Central Bank’s failure to decarbonize its quantitative easing |publisher=Reclaim Finance |date=20 September 2022 |url=https://reclaimfinance.org/site/en/2022/09/20/european-central-banks-failure-to-decarbonize-its-quantitative-easing/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2022european, author = {Martin, Léo}, title = {{European Central Bank’s failure to decarbonize its quantitative easing}}, publisher = {Reclaim Finance}, year = {2022}, month = sep, url = {https://reclaimfinance.org/site/en/2022/09/20/european-central-banks-failure-to-decarbonize-its-quantitative-easing/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }