European Central Bank reports further decline in portfolio emissions and adds inflation-adjusted climate metrics

The European Central Bank published its fourth set of climate-related financial disclosures, covering Eurosystem monetary policy portfolios, the ECB’s foreign reserves and its non-monetary policy portfolios. The update shows that emissions linked to the Eurosystem’s monetary policy portfolios and the ECB’s foreign reserves continued to fall in absolute terms, while the Eurosystem remained on track in 2025 to meet its interim emissions reduction targets for corporate bonds held for monetary policy purposes. The decline in emissions was driven mainly by the ongoing run-off of portfolios, which shrank by 13% in 2025. The ECB said that, because this run-off limits its ability to keep tilting reinvestments toward issuers with better climate performance, further emissions reductions will increasingly depend on issuers reducing their own emissions. To improve transparency, the disclosures introduce inflation-adjusted emissions metrics for the first time, intended to strip out apparent improvements caused by higher nominal revenue during inflation. They also add, for the first time, relative metrics for scope 3 emissions of non-sovereign holdings, reflecting better data coverage even though limitations remain. The ECB’s non-monetary policy portfolios also showed further progress. In the staff pension fund, the relative carbon footprint of corporate assets fell further in 2025, while in the ECB’s own funds portfolio the share of green bonds rose to 33% at the end of 2025, channeling EUR 7.6 billion toward the green transition. The ECB aims to raise that share to 35% in 2026 and said it intends to expand nature-related disclosures over time as data quality and reporting standards improve.