ECB unveils financed emissions and sustainable finance indicators


The European Central Bank (ECB) has published a series of new statistical indicators aimed at helping to analyse climate-related risks in finance.

According to ESG Today, the launch of the new indicators forms part of the ECB’s climate action plan which it launched in July last year.

The new data sets cover three key areas, including financed emissions, sustainable finance and the impact of physical climate risks on loan and security portfolios.

For sustainable finance, the indicators track the issuance and holdings of debt instruments with sustainability characteristics, such as social, green, sustainability and sustainability-linked bonds in the Euro area.

According to the ECB, the data from the indicators show that volume of sustainable and green bonds has grown significantly faster than the broader bond market, doubling in the past two years in the euro area market.

The indicators that cover carbon emissions financed by financial institutions include information on the carbon intensity of the institution’s securities and loan portfolios, and on the sector’s exposure to counterparties with carbon-intensive business models. Indicators in this specific area include financed emissions, or the total greenhouse gas emissions of a debtor or issuer.

The ECB’s indicators on climate-related physical risks aim to analyse the impact of natural hazards, such as floods, wildfires or storms, on the performance of loans, bonds and equities portfolios.

ECB executive board member Isabel Schnabel said, “We need a better understanding of how climate change will affect the financial sector, and vice versa. For this, the development of high-quality data is key.

“The indicators are a first step to help narrow the climate data gap, which is crucial to make further progress towards a climate-neutral economy.”

The ECB recently published the results of its thematic review, which has shown that banks are ‘still far’ from managing climate risks.

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