The ECB says it has concluded its climate and nature plan for 2024-2025, marking a further step in embedding climate- and nature-related risks into its day-to-day responsibilities.
The ECB said its work over the past two years has refined how these risks are assessed and how they feed into policy decisions, while also strengthening approaches in bank supervision and the management of its own portfolios and operations.
A central theme of the update is deeper integration of climate and nature considerations across the monetary policy framework. The ECB said it has continued work on incorporating these factors into the Eurosystem’s collateral framework and has reduced the carbon emissions associated with the Eurosystem’s corporate bond holdings. It also noted that transition policies, including Emissions Trading System 2, are now reflected in its macroeconomic assessments and projections, signalling an effort to make climate transition dynamics more visible in core economic analysis.
On data and risk assessment, the ECB highlighted its contribution to climate stress testing and scenario analysis, including the Fit-for-55 exercise, and said it is leading work on designing climate scenarios within the Network for Greening the Financial System. It also reported updates to its statistical climate indicators, citing new methodologies and data that aim to improve monitoring of sustainable finance developments, progress on carbon-emissions reduction, and the impact of climate-related physical hazards.
The ECB also pointed to progress in the banking sector, arguing that banks are now better equipped to assess climate and nature risks. It said this has been supported by ongoing follow-up from ECB Banking Supervision, including the use of binding decisions where needed—an indication that supervisors are willing to escalate requirements when remediation is too slow.
Internally, the ECB said it has continued to account for climate considerations when managing its own non-monetary policy portfolios. It also reported that emissions from its own operations fell by 39% in 2024 compared with 2019, aligning the institution’s operational footprint with its stated 2030 environmental targets.
Nature is positioned as a growing strand of the ECB’s agenda. The central bank said its updated monetary policy strategy statement explicitly recognises the implications of nature degradation for monetary policy, while its research has highlighted strong interconnections between nature and the euro area economy. Water-related risks were singled out as the most material, reinforcing broader concerns that ecosystem pressures can become economic and financial risks.
Looking ahead, the ECB said it will intensify work across three priority areas: supporting the transition to a green economy, strengthening analysis and monitoring of the physical impacts of climate change, and expanding assessment of nature-related risks—again highlighting water-related vulnerabilities. These priorities will sit alongside ongoing actions spanning monetary policy, banking supervision and financial stability, as well as continued work on climate-related indicators, disclosures, and contributions to European and global policy discussions.
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