The European Central Bank (ECB) announced on Friday that it will extend the use of climate factors in the Eurosystem collateral framework to non-financial corporate credit claims. The decision aligns with the ECB's climate action plan and its commitment to integrate climate risk into monetary policy operations.
Under the new measure, credit claims from non-financial corporations will be subject to climate-related valuation haircuts, similar to those already applied to marketable assets. The adjustment will be based on the issuer's carbon intensity and climate risk profile, as part of the ECB's efforts to reduce the carbon footprint of its collateral.
The ECB said the extension will apply from [date], with a transitional period to allow counterparties to adapt. The move is expected to encourage banks to consider climate risks when lending to non-financial firms, supporting the transition to a low-carbon economy.
The decision follows a public consultation and is part of the ECB's broader strategy to incorporate climate change considerations into its monetary policy framework. The ECB will continue to monitor and adjust the measures as needed.
Source: European Central Bank
