The European Central Bank has closed its climate and nature plan 2024-2025, reporting that climate and nature-related risks are now more embedded in its day-to-day work, including monetary policy, banking supervision, and the management of its own portfolios and operations. Implementation steps highlighted include deeper integration of climate and nature considerations in the monetary policy framework, including the Eurosystem collateral framework, and a reduction in the carbon emissions of the Eurosystem’s corporate bond holdings. Climate considerations, including transition policies such as Emissions Trading System 2, have been incorporated into macroeconomic assessments and projections; the ECB has expanded climate stress testing and scenario analysis, including the Fit-for-55 exercise, and is leading work on climate scenarios within the Network for Greening the Financial System. ECB Banking Supervision has continued follow-up with banks, including binding decisions where necessary, while the ECB also reported a 39% reduction in emissions from its own operations in 2024 compared with 2019. On nature, the updated monetary policy strategy statement explicitly acknowledges implications of nature degradation, and ECB research highlighted water-related risks as particularly material. Future work will be intensified in three areas: supporting the transition to a green economy, including assessing banks’ prudential transition plans and exploring further incorporation of climate considerations in the operational framework; strengthening readiness for growing physical impacts through enhanced macroeconomic analysis, data and monitoring, and further analysis of banks’ capabilities; and deepening assessment of nature-related risks and ecosystem degradation, including water-related risks.
European Central Bank 2026-01-16
European Central Bank concludes its 2024-2025 climate and nature plan and sets three priority areas to deepen integration across policy, supervision and operations
The European Central Bank's 2024-2025 plan integrates climate and nature risks into monetary policy, banking supervision, and portfolio management. Key actions include reducing carbon emissions in corporate bond holdings, expanding climate stress testing, and acknowledging nature degradation in policy. Future efforts focus on supporting the green transition, enhancing readiness for physical impacts, and assessing nature-related risks.