ECB Sets Stricter Climate Targets for Its Bond Portfolio.

The European Central Bank (ECB) has announced stricter climate targets for its bond portfolio, signaling its intention to take action against companies that do not meet climate pledges. The ECB's Governing Council will set interim emission-reduction targets for its corporate portfolios, using the EU's climate benchmarks legislation as a guide. The ECB is taking a more proactive approach to addressing climate change compared to other major central banks. The announced targets will be used to track progress, and potential remedial actions will be considered on a case-by-case basis. The ECB has also expanded the scope of assets subject to a climate review, including public sector assets, covered bonds, and foreign reserves. The ECB's assessment shows a decline in emissions for corporate assets and other assets, excluding value chain emissions. Rising prices and inflation have had a positive impact on issuers' carbon efficiency. The ECB will work with standard-setting bodies to address the lack of a methodology for accounting for inflation. [Extracted from the article]