The European Central Bank should take “concrete action” to help tackle the climate crisis, more than 160 academics and civil society groups said in a letter to new ECB chief Christine Lagarde.
“The most powerful financial institution in Europe cannot just sit passively as we witness a growing environmental crisis,” the letter said, urging Lagarde to ditch fossil fuel-linked investments.
“Without any further delay, the ECB should commit to gradually eliminating carbon-intensive assets from its portfolios, starting with immediate divestment from coal-related assets.”
Among the 164 signatories were campaign groups Greenpeace and 350.org, the charity Caritas France, former Dutch environment minister Jacqueline Cramer and Britain’s ex-Financial Services Authority chairman Adair Turner.
Lagarde took the reins at the ECB at the start of November pledging a stronger focus on climate change risks and environmental protection.
But she immediately ran into opposition from Germany’s powerful Bundesbank central bank chief Jens Weidmann who said he was critical about “calls for a green monetary policy”.
Preferentially targeting “green” bonds for asset purchases by the ECB would violate the ECB’s principle of “market neutrality”, he argued.
But writers of the letter urged Lagarde, the bank’s first female president, to push back against “resistance from those who think central banks should leave climate policies to others”.
They said it was “shocking” that the ECB was still buying assets from companies in carbon-intensive and fossil fuel-related industries as part of its huge bond-purchasing programme to boost economic growth.
The Frankfurt institution should show “ingenuity” and redesign the scheme to support investments that contribute to the green transition, the letter said.
The public appeal comes ahead of a UN summit on the climate crisis in Madrid next week, amid growing alarm about global warming.
In a symbolic move on Thursday, the European Parliament declared “a climate and environment emergency”.
The European Investment Bank, the lending arm of the European Union, announced earlier this month it would end all fossil fuel financing from 2022 and prioritise lending to clean energy projects.