45 economic think-tanks, NGOs urge the European Central Bank to tackle both COVID-19 and climate crisis with recovery measures
Europe – Today a group of 45 think-tanks and NGOs across Europe wrote to Christine Lagarde, President of the European Central Bank, urging the ECB to take into account the risks that the climate crisis poses to the global economy in its response measures to the pandemic. The organisations call on the ECB to align its work with a real Green New Deal that leaves no-one behind, to provide a united front in the face of this global tragedy.
Frank Van Lerven, Senior Economist, NEF said:
“The ECB is laying out a number of important measures that will have profound and long lasting impacts, not just on financial markets, people and families across the EU, but for the planet and our environmental goals too. Before the pandemic hit, our financial markets were set to fund a 4C temperature rise, which scientists have warned time and again would trigger disasters of an unprecedented scale. After the COVID-19 crisis, we cannot afford to go back to business as usual – we need to bounce back stronger. These recommendations represent bold solutions that can help reshape finance and harness its benefits so that we can begin sewing the seeds for a resilient recovery.”
Clémence Dubois, France campaigner at 350.org said:
“The European Central Bank is releasing 750 billion Euros to bolster European markets through its pandemic response plan. The measures being deployed right now will help to shape our economies and societies for years to come. Christine Lagarde has repeatedly pledged to incorporate climate risk into the bank’s operation, but now it is buying up bonds from polluting corporations like Shell and Total that are driving climate breakdown. Our public institutions must not seek to solve one crisis only to create another, the bank must bailout the people not fossil fuel companies and support a just recovery centred around a Green Deal.”
Stanislas Jourdan, Executive Director, Positive Money Europe said:
“The ECB’s recent actions to tackle Covid-19 have led the bank to ditch its ideological straightjacket and embrace measures which were unthinkable only a few months ago. We now expect the ECB to act with the same boldness and creativity when addressing the biggest crisis of our time – the climate crisis. Action is needed not only in terms of the ECB’s delayed strategic review, but also beforehand. There is no time left to waste.”
Sandrine Dixson-Declève, Co-President, The Club of Rome said:
“Both the European Parliament and the ECB have acknowledged that the ECB is bound to the Paris agreement. Key financial institutions such as the EIB and EBRD are currently in the process of ensuring that their lending is Paris aligned, and the European Commission has reiterated its commitment to the Green Deal and a sustainable fiscal stimulus. The ECB has the support of these signatories to take this work forward. In this moment of crisis we need all institutions to work together to steer the economy in the same direction and ensure that people-planet-prosperity are at its core.”
The letter, sent in advance of the ECB’s governing council meeting on April 30, recommends five steps for developing sustainable recovery measures. These include:
- Aligning the ECB’s asset purchasing programmes and collateral frameworks with the Paris Agreement;
- Aligning its refinancing operations to the banking sector with the Paris Agreement;
- Supporting asset markets for sustainable investment and coordinating operations with the European Investment Bank (or other equivalent European institutions) to ramp up green investment;
- Implementing prudential measures to increase the resilience of the European banking sector to climate risks and reduce brown financial flows (e.g. financing of fossil fuels);
- Assessing and regularly communicating to elected officials information about the alignment of its operations with the Paris Agreement and that of the European Banking sector.
Signatories include major international NGOs such as Greenpeace and Oxfam, as well as key European institutions such as: Finanzwende from Germany; Reclaim Finance from France; WWF Greece; Economic Democracy Finland; Trocaire from Ireland; IIDMA from Spain; FOCSIV from Italy; and Klima Allianz Switzerland.
Notes to the editor
For more information on the People not Polluters campaign visit the website.
The letter was coordinated by a group of organisations, including the Council on Economic Policies, New Economics Foundation, Positive Money Europe, and 350.org
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Please note that representatives of the group coordinating this letter met with Christine Lagarde in December 2019 to discuss the importance of integrating climate change in the ECB’s strategic review. Details about this previous engagement can be found here.