Towards Greener Central Banking: Insights into the ECB

This paper aims at providing a framework for analysis on forward steps that central banks could move in sight of promoting a greener financial industry. Actually, significant efforts have been undertaken even before the 17 Sustainable Development Goals were agreed upon by the United Nations but much remains on the global agenda: in particular, it is a matter of integrating environmental – as well as social and governance – criteria more deeply into the core (and other) activities carried out by central (and other) banks. A case in point has to do with embedding these criteria in their operating schemes, including their asset purchases, with a special emphasis to be put on climate risk aspects and to the transition to a low carbon economy. As far as the European Central Bank, evidence of its contribution to the European Union’s environmental goals can be found in its Environmental Statements; they tend to emphasize what has been achieved in terms of fostering an internal culture of environmental awareness and keeping resource consumption low. Anyway, it seems appropriate to question whether the pursuit of greener central banking needs more than that and supporting arguments stem from the legal obligations to be fulfilled by the European Central Bank. Conclusions pave the way to further research that may draw upon the unexploited potential for the banks under investigation to act as catalysts for greening the financial system; progress can be envisaged, which involves monetary policy instruments, as well as financial regulation, encompassing capital requirements and disclosure rules.