The New Sustainability Strategy of the ECB

The chapter delves into the European Central Bank's (ECB) newly adopted sustainability strategy, emphasizing its role in mitigating the climate crisis. It outlines the ECB's commitment to integrating climate change considerations into its monetary policy framework, banking supervision, and internal operations. The ECB's climate action plan, unanimously approved by the Governing Council, aims to address the economic and financial risks posed by climate change. This includes developing new macroeconomic models, conducting climate stress tests, and enhancing risk assessment capabilities. The chapter also highlights the ECB's efforts to align its corporate bond purchases with EU climate goals and to encourage banks to better manage climate-related risks. Overall, the ECB's strategy underscores its proactive approach to facilitating a transition to a carbon-neutral economy within the EU's legal framework.