The European Central Bank (EBC) will ‘green’ its corporate bond buying and develop data and modeling for climate risk as part of a wide-ranging new roadmap on climate change.
The influential body has unveiled a raft of initiatives it will pursue over the next four years to integrate climate change into its activities.
In the two-page roadmap, the ECB confirms that its Corporate Sector Purchase Programme, which currently purchases more than €5bn in bonds each month, will soon be subject to climate-related disclosures and will begin to integrate climate considerations into its framework towards the tail end of 2022.
The ECB will propose new benchmarks for its QE programmes. Historically, the bank has prided itself on using ‘market neutral’ benchmarks, but growing evidence suggests that market cap-weighted benchmarks are implicitly skewed in favour of large, often heavily-polluting companies, putting the ECB’s asset allocation at odds wit…