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On January 23, 2020, the European Central Bank (ECB) logo was photographed in Frankfurt, Germany. REUTERS/File Photo/Ralph Orlowski Reuters, MADRID, July 2 – According to policymaker Pablo Hernandez de Cos, the European Central Bank may consider including climate risk disclosure requirements in its criteria for buying corporate bonds and accepting collateral for lending. Central banks all over the world are debating what role they should play in combating climate change, and ECB President Christine Lagarde is eager to include it into monetary policy. “Central banks have a balance sheet, and we have assets generated by our monetary policy activities,” Hernandez de Cos said during a forum hosted by Spain’s Ministry of Energy and the Environment. “We could conceivably make our purchases of corporate bonds, or our collateral, conditional on the firms whose bonds we are going to buy satisfying established terms on revealing information that obviously helps us in the battle against climate change,” says the author. The ECB’s guiding concept in a five-year program of corporate bond purchases that has already totaled hundreds of billions of euros has been market neutrality, with bonds purchased in proportion to their outstanding amounts. “We will internalize (borrowers’)physical and transition risks because central banks have an obligation to do so,” De Cos added. “(1 dollar Equals 0.8456 euros) Isla Binnie contributed reporting, and Francesco Canepa and Giles Elgood edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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