(Bloomberg) -- The European Central Bank is coming under renewed pressure to clean up its environmental act, with a report on Monday highlighting that polluting companies account for 63% of its corporate-asset purchases.
According to analysis from Reclaim Finance, the ECB bought bonds from 38 fossil fuel-related businesses, including 10 that are active in the coal sector and four specializing in shale oil and gas. The group called on the central bank to align its bond holdings with European objectives to make the continent the first climate-neutral region by 2050.
“It is unacceptable that the European quantitative easing finances corporations like Fortum, whose subsidiary intends to start a new German coal power plant,” Paul Schreiber, a campaigner for Reclaim Finance, said in a statement. “It has to stop, the ECB needs to immediately exclude the most polluting firms from its asset purchases.”
The report adds to a growing chorus of academic and civil society groups like Positive Money Europe urging the ECB to purge bonds of climate polluters from its balance sheet. Last year, President Christine Lagarde promised to put green issues front and center of a strategic review, but that big policy rethink was postponed last month because of the coronavirus pandemic.
According to the study, dumping bonds of emission-intensive companies such as airlines and utilities could free up 132 billion euro that could be spent elsewhere.
The ECB has previously pushed back against accusations that it's giving favorable treatment to assets of polluters, arguing that purchases simply reflect the structure of the euro-area corporate-bond market.
Yet renewed criticism of the central bank's environmental record also reflects a growing push for greater scrutiny of an institution that has massively expanded its powers over the past decade of crisis-fighting.
“Our report demonstrates the urgency to put an end to the principle of ‘market neutrality' that guides asset purchases,” said Lucie Pinson, director of Reclaim Finance. “Preserving this dogma means refusing to acknowledge the political dimension of monetary creation and is anachronistic in a context of climate emergency.”
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