ECB’s new bond purchasing worth €500 billion exacerbates the climate crisis

Frankfurt/ Brussels – The European Central Bank (ECB) governing council approved new bond purchasing worth €500 billion. The bank’s decision, while responding to the economic crisis triggered by the coronavirus pandemic, fails to respond to the climate crisis as it does not exclude fossil fuels and other carbon-intensive sectors from its asset purchases.

Greenpeace climate and energy campaigner Adam Pawloff said: “The ECB can’t continue with ‘business as usual’ practices that fuel the climate crisis in an attempt to address the aftermath of the Covid-19 pandemic. Its current monetary policy contributes to cementing in the carbon-intensive structure of our economy for years to come and runs counter to the EU Green Deal and efforts to achieve climate neutrality. The ECB must align its policies with the Paris Climate Agreement, contributing to a green and just recovery, and as a first step it should exclude fossil fuels from its asset purchases.”

The ECB has announced asset purchases known as quantitative easing (QE) in two tranches up to a total of 1.35 trillion euros to date this year, in a programme known as the Pandemic Emergency Purchasing Programme (PEPP) and through the Asset Purchase Program (APP) with monthly purchases of 20 billion Euros and a total stock of 2.9 trillion Euros. The majority of bonds purchased are from governments, whilst some also come from corporations.

Greenpeace, together with the New Economics Foundation and a number of universities recently launched a report that shows how the ECB policy of ‘market neutrality’ actually skews the bank’s corporate bond purchases in favor of carbon intensive industries.The ECB holds bonds from many of the EU’s worst emitters, including Total, Shell, OMV and Eni. The analysis also indicates that 62.7% of the bonds held by the ECB come from carbon-intensive sectors that contribute only 17.8% to employment and 29.1% to gross value added in the Euro area.

Greenpeace demands that the ECB exclude fossil fuel companies from all future asset purchases and that the ECB’s monetary policy review due to be completed by mid 2021 leads to the inclusion of climate risk throughout ECB operations, whether it is by the exclusion of fossil fuels from collateral that banks are allowed to give the ECB when they borrow money, or by aligning its refinancing operations to the banking sector with the Paris Agreement.

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Contacts:

Adam Pawloff – Greenpeace climate and energy campaigner: +43 650 3722524, adam.pawloff@greenpeace.org

Mihaela Bogeljić – Greenpeace communications: +385 92 2929 265, mihaela.bogeljic@greenpeace.org