23 Jan 2020
The European Central Bank (ECB) has a role to play in climate action, members of the European Parliament committee on economic and monetary affairs said on Thursday.
MEPs approved by 40 votes against five a report assessing the ECB’s policy that called for the bank to do more to address the issue, siding with its new president Christine Lagarde, who has several times called for greater climate ambition.
The committee’s non-binding resolution will now have to be endorsed by the full parliament.
Industry commissioner Thierry Breton also spoke this week about the role for central banks in financing the €1tn needed for the recently announced European Green Deal.
However, the EPP group in the European Parliament warned against “overstretching” the ECB’s mandate. “We must not confuse the European Central Bank and the European Environment Agency,” said MEPs Agnès Evren and Markus Ferber after the committee vote. “We should be very clear: the ECB’s mandate is price stability.”
Evren added that the green deal will require the deployment of all appropriate instruments, “but this cannot jeopardise the stability of our European currency”.
Sébastien Godinot, economist at WWF European Policy Office, said the vote shows “a European consensus is emerging on the vital role of the ECB in the climate crisis”.
According to the green group, “there is a growing recognition amongst policy-makers and experts that the global economy faces significant and hugely destabilising climate-related financial risks that could turn into systemic financial risks”.
In a recent report, the Bank for International Settlements, a financial institution owned by central banks, said “central banks have a role to play” on climate change.
That role includes “seeking to improve their understanding of climate-related risks through the development of forward-looking scenario-based analysis”, the group added, “but central banks alone cannot mitigate climate change”.