O European central bank it has reduced the carbon intensity of its 385 billion euro stockpile of corporate bonds, but slowing purchases are slowing its progress, an ECB report showed on Thursday.
The President of the ECB, Christine Lagardehas made incorporating climate considerations into monetary policy a goal of his tenure, even as other central bankers and some of their peers are skeptical about the issue.
In its first publication of its kind, the ECB said the carbon intensity – a measure that relates a company’s emissions to its revenues and the size of investment – of its new corporate credit purchases has fallen by more than half since it adopted a ” green slope” when choosing titles late last year.
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The weighted average carbon intensity of corporate debt purchased by the ECB in the final quarter of last year was just under 200 tonnes of CO2 per million in revenue generated by the company, compared with almost 400 tonnes in the first three quarters of the year.
But the ECB has steadily reduced the volume of its bond purchases in its effort to contain the inflationwhich means that new greener purchases hardly made a difference to the overall stock of bonds accumulated over several years.
“While this provides an encouraging initial indication of the potential of the framework, the large stock of existing holdings relative to reinvestments implies that it will take some time for the (green) tilt to have a substantial impact on overall carbon metrics,” the ECB said in the report. .
The ECB stopped buying bonds last year and is now only replacing some of those that mature, aiming to end these reinvestments possibly as early as July.
The central bank of the 20 countries that share the euro said it could adapt its purchases “to a variety of reinvestment scenarios” and would report on its progress.
“Going forward, we will develop interim decarbonisation targets that will help us stay on track towards our ultimate targets,” Isabel Schnabel, a member of the Governing Council, said in the report.
Source: Moneytimes
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