Stockholm (NordSIP) – On Monday, January 25th, the European Central Bank (ECB) took another step in its climate change mitigation journey, announcing the creation of a climate change centre to coordinate environmental efforts across different parts of the bank. “Climate change affects all of our policy areas,” said ECB President Christine Lagarde. “The climate change centre provides the structure we need to tackle the issue with the urgency and determination that it deserves.”
The decision parallels the announcement that the ECB will invest in a new green bond fund managed by the Bank for International Settlements (BIS). The increased focus on climate change reflects the shift in priorities since Lagarde became president of the ECB’s Governing Council. “Climate change is without doubt one of the existential threats of our times. It is a challenge that requires European and international cooperation as no country can solve it alone,” Lagarde commented at her 2019 confirmation hearing at the European Parliament. “[The] primary mandate [of the ECB is] price stability, of course. But it has to be embedded in that that climate change and environmental risks are mission-critical,” she added.
The new unit will report to the ECB’s President and include approximately ten staff members who will coordinate their work with existing teams across the bank to guide the ECB’s climate agenda internally and externally. Its activities will be organised in workstreams, ranging from monetary policy to prudential functions. The new structure will be reviewed after three years, as the aim is to ultimately incorporate climate considerations into the routine business of the ECB.
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