On Monday January 25, the European Central Bank (ECB) announced the creation of a center of expertise dedicated entirely to climate change. The aim is to study more closely the present and future impact of global warming on monetary policy and the economy.
Study the impact of climate change on the financial system
This center should be operational by early 2021, as announced in a recent ECB press release. It will be staffed by around ten experts, including data management and climate science specialists, who will work in close cooperation with the European Central Bank's teams, under the direction of its President, Christine Lagarde.
The aim of the center is to "strengthen and federate the ECB's work on climate", and to help define the institution's climate agenda.
"Climate change affects all our areas of action", explained Christine Lagarde, adding that "the climate change center provides the structure we need to tackle the issue with the urgency and determination it deserves".
According to the ECB President, for whom the fight against global warming is a priority, this environmental issue has an impact on the institution's primary mission, which is to guarantee "price stability through several channels".
Setting the ECB's climate agenda
Through the creation of this center dedicated to climate change, the ECB intends to put in place "a more structured approach to strategic planning and coordination". The institution already has several teams working on the subject: the center of expertise will bring together this diverse work and guide the ECB's actions in this field.
This new structure will be reviewed in three years' time. Ultimately, the European Central Bank aims to integrate climate issues into its day-to-day activities.
A year ago, for the first time since 2003, the ECB launched a review of its monetary policy strategy, with the fight against global warming very likely to be taken into account. An awareness which, according to Christine Lagarde, is set to grow with the Covid-19 pandemic.