The European Central Bank has closed its climate and nature plan 2024-2025, reporting that climate and nature-related risks are now more fully embedded in its day-to-day work, including monetary policy, banking supervision and the management of its own portfolios and operations. It also set out three priority areas for further work to strengthen analytical and operational readiness as the economic and financial impacts of climate change and nature degradation grow. Within the monetary policy framework, climate and nature considerations have been further integrated, including in the Eurosystem’s collateral framework, alongside a reduction in the carbon emissions of the Eurosystem’s corporate bond holdings; climate transition policies, including Emissions Trading System 2, are now reflected in macroeconomic assessments and projections. Risk analysis has been strengthened through climate stress testing and scenario work, including the Fit-for-55 exercise, with the ECB leading the design of climate scenarios within the Network for Greening the Financial System, and statistical climate indicators updated with new methodologies and data. For supervised banks, resilience work has been reinforced through ongoing supervisory follow-up, including binding decisions where necessary, while the ECB also reported further integration of climate considerations in its non-monetary policy portfolios and a 39% reduction in emissions from its own operations in 2024 compared with 2019; on nature, its updated monetary policy strategy statement explicitly acknowledges the implications of nature degradation, with ECB research highlighting water-related risks as the most material. Next, the ECB will focus on the transition to a green economy, the growing physical impacts of climate change, and nature-related risks and ecosystem degradation, including water-related risks. These priorities sit alongside ongoing actions such as implementing the climate factor in the Eurosystem collateral framework, further developing scenario and stress test methodologies, improving climate-related data, indicators and disclosures, and contributing to European and global policy discussions where relevant.
European Central Bank 2026-01-16
European Central Bank concludes its 2024-2025 climate and nature plan and sets priorities for further integration across policy supervision and operations
The European Central Bank has concluded its climate and nature plan for 2024-2025, embedding climate and nature-related risks into its operations, including monetary policy and banking supervision. It has set three priority areas: transitioning to a green economy, addressing the physical impacts of climate change, and managing nature-related risks, while continuing to enhance climate-related data, scenario methodologies, and policy discussions.