June 4, 2020

European Central Bank Warned Against Hypocrisy over Fossil Fuel Finance

  • European Commission pledges its coronavirus recovery plan will “do no harm” to the environment, but the European Central Bank (ECB) could hand over €132 billion to biggest polluters including Shell and Total.
  • Over 100,000 people sign a petition calling for the ECB to stop funding the climate crisis, ahead of key ECB meeting on Thursday.

The European Commission’s climate pledges are being directly undermined by its own Central Bank as the two institutions scramble to rebuild economies after the COVID-19 crisis, campaigners have warned.

ECB President Christine Lagarde and heads of EU Member States’ central banks will meet for an ECB Board of Governors meeting on Thursday 4 June to decide the next steps for the Bank’s response to COVID-19. Campaigners from 350.org, SumOfUsand Reclaim Finance have warned the Governors risk being branded hypocrites unless they stop funding fossil fuel companies in this process.

The ECB could purchase up to €210 billion of corporate bonds in 2020, as part of its €1.1 trillion Quantitative Easing programme to support the European economy during the COVID-19 crisis. A Reclaim Finance briefing reveals the ECB will purchase bonds from 300 multinational companies, of which 38 are fossil fuel companies and 10 are active in coal and 4 in shale oil and gas.  Many of these companies are increasing their fossil fuel production and up to 63% (€132 billion) of the ECB’s corporate asset purchases could go to the most polluting companies such as airlines and utilities.

45 European NGOs recently wrote to Christine Lagarde asking her to align the ECB’s asset purchasing programmes with the Paris Climate Agreement. In her response, the ECB President acknowledged the urgent need to tackle climate change, but failed to commit to act.

This wait-and-see position, contrasts with the European Commission (EC) pledge that its separate €750 billion coronavirus recovery plan will “do no harm” to the EU’s goals to tackle the climate crisis, following a successful campaign supported by over 300,000 SumOfUs members. While the EC plan includes new funding for green transport, clean industry and renovating homes, 350.org, SumOfUs and Reclaim Finance warned that the ECB is set to undermine it by pouring billions into the most polluting activities, including coal, oil, gas and airline industries.

Leyla Larbi, Senior Campaigner at SumOfUs, said: “The EU is fighting the climate emergency with one hand, while throwing money at the fossil fuel industry with the other. It simply doesn’t add up. The ECB has a once in a generational opportunity to rebuild our economies more fairly and sustainably by setting strict environmental criteria to determine which companies it invests in. Thousands of European citizens want to see Christine Lagarde put the planet before short term profits for polluters.”

Paul Schreiber, Campaigner at Reclaim Finance, said: “Christine Lagarde and all members of the ECB Board of Governors, notably French Governor Villeroy De Galhau, can’t keep simultaneously acknowledging climate urgency and refusing to act. To avoid jeopardizing climate objectives and hopes for a greener Europe, the ECB must immediately exclude bonds from companies that plan on expanding fossil fuel production, and do not commit to a 1.5°C trajectory, from its asset purchases. It must then go further by taking advantage of its current strategic review to integrate climate in all of its operations.”

Nick Bryer, Europe Campaigner at 350.orgsaid: “Christine Lagarde has repeatedly said how important it is for the ECB to contribute to the fight against climate change, and yet the bank has done nothing to align their coronavirus recovery efforts with Europe’s climate commitments. In fact, by buying bonds from the likes of Shell and Total, they are propping up the single biggest obstacle to us achieving those commitments – the fossil fuel industry.”

Christine Lagarde promised to consider green issues in the strategic review of the ECB. However, the review will not be achieved before mid-2021 and campaigners say the total absence of climate criterion in the COVID-19 response suggests low ambitions on the matter.


Useful links:

Petition: https://actions.sumofus.org/a/european-central-bank-stop-funding-the-climate-crisis

Report – ECB’s dirty quantitative easing:

Open letter to the European Central Bank:


Mark Raven, 350.org, 0044 20 7097 3819, [email protected]