The European Central Bank may consider imposing climate risk disclosure conditions in its criteria for buying corporate bonds and accepting collateral for lending, policymaker Pablo Hernandez de Cos said on Friday.
Central banks around the world are busy working out what their role should be in the fight against climate change, and ECB President Christine Lagarde is keen to incorporate it into monetary policy.
“Central banks have a balance sheet, we have assets generated by our monetary policy activity,” Hernandez de Cos told a panel organised by Spain’s Energy and Environment Ministry.
“We could potentially make our purchases of corporate bonds, or our collateral, we could make the acceptance or purchase of those conditional on the companies whose bonds we are going to buy meeting established conditions on releasing information that obviously also helps us in the fight against climate change.”
Until now, the ECB’s guiding principle in a five year-old programme of corporate bond purchases that now totals hundreds of billions of euros has been one of market neutrality, buying bonds in proportion to their outstanding amounts.
“Central banks have a duty to internalise (borrowers’)physical and transition risks and we will do so,” De Cos said.”