President of the European Central Bank (ECB) Christine Lagarde has given the clearest signal yet that she is poised to ramp up the central bank’s green efforts, declaring that she is prepared to “explore every avenue available in order to combat climate change”.
Speaking in an interview with the FT, Lagarde hinted that bank would consider proposals from campaigners for it to use its €2.8tr asset purchase scheme to pursue green objectives.
“I want to explore every avenue available in order to combat climate change,” she said. “This is something that I hold very strongly.”
She added that the bank “has to look at all the business lines and the operations in which we are engaged in order to tackle climate change, because at the end of the day, money talks.”
She also offered a highly personal rejection of calls for banks and governments to curb green ambitions as they seek to revive economies hit by the coronavirus crisis.
“Those who would be tempted by that option would live to regret it,” she said. “I have children, I have grandchildren. I just don’t want to face those beautiful eyes, asking me and others: ‘What have you done?'”
Any move by the ECB to offload some of its bonds issued to carbon intensive companies and increase its exposure to green bonds would increase pressure on other central banks to follow suit.
The Bank of England has said it is similarly considering incorporating climate considerations when undertaking corporate bond purchases.
However, the Bank has also faced fierce criticism from green groups for failing to attach environmental conditions to the bailouts it has awarded in recent months, and campaign group Plan B today warned the Bank and the UK government could face legal action over the practice, which it argued could be in breach of national climate laws and the Paris Agreement.
Source BusinessGreen