The European Central Bank published its expanded climate and nature plan for 2024 and 2025 on 30 January 2024, setting out a supervisory and policy agenda that incorporates nature-related financial risks alongside the climate-risk framework that the ECB has been building across its prudential and monetary-policy functions.
NATURE RISK, TRANSITION PLANS, AND GREENER POLICY OPERATIONS
Under the 2024–2025 plan, the ECB will further explore the economic and financial implications of biodiversity loss and the degradation of nature, and their possible implications for monetary policy and the financial system. Alongside nature-related work, ECB Banking Supervision will assess and follow up on banks' alignment with its supervisory expectations and carry out preparatory work on transition planning.
The plan also encompasses further steps towards greening the ECB's own monetary-policy operations. The central bank has already begun tilting the reinvestment of its corporate-bond holdings towards issuers with stronger climate credentials.
SUPERVISORY DEADLINES SET IN 2022
In November 2022 the ECB set banks institution-specific deadlines to meet its climate-risk expectations in full by the end of 2024, and it has said climate-related shortcomings can affect banks' SREP scores and Pillar 2 requirements.