Lexis®Library update: The Bank uses the Corporate Sector Purchase Programme to make the purchases, which ClientEarth believes sends capital to some of Europe’s biggest polluting industries, with allegedly over half of the $266bn worth of assets under the programme coming from high emitting companies, including many involved in the fossil fuel industry.
The Corporate Sector Purchase Programme was devised by the European Central Bank (ECB) and ClientEarth is hoping to overturn its validity, which would involve the legal challenge going to the European Court of Justice.
ClientEarth have said: ‘We argue that the ECB’s decision establishing the programme failed to assess the climate impact of buying these corporate assets despite its legal obligations to do so. If found to be invalid, ClientEarth asks the court to order the Belgian central bank to stop purchasing bonds under the programme.’
ClientEarth has also made three recommendations to the ECB that they say would align corporate bond purchases with the goals set out in the Paris Agreement:
- excluding companies from the purchase programme that are incompatible with the goals of the Paris Agreement
- stopping or constraining purchases of bonds from companies with high carbon emissions if they do not implement, by January 2023 a credible strategy to achieve net zero emissions
- publishing a comprehensive plan detailing how monetary policy portfolios and activities will be aligned with aims from the Paris Agreement
The full letter from ClientEarth is available here.
Source: Why ClientEarth is suing the central bank of Belgium for climate failings
This content was first published by LNB News / Lexis®Library, a LexisNexis® company, on 13 April 2021 and is published with permission. Further information can be found at: www.lexisnexis.co.uk.
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