Abstract
The chapter discusses some of the issues that have been addressed in Chapter 11 on Green bonds and the ECB: A Tale of (Measured) Promise and (Required) Caution by Basil Scouteris and Elli Anastopoulou. Their chapter addresses the important question of what the European Central Bank (ECB) can do in accordance with its mandate to address the risks posed by climate change when defining and implementing monetary policy. These observations focus on issues that are relevant to the overarching theme of this book. Specifically, what are the implications of regulatory and market developments in relation to green bonds for monetary policy from a legal perspective? The comments are structured around the two main uses of green bonds when implementing monetary policy: (i) the purchase of green bonds in the ECB’s asset purchase programme (APP) and (ii) the use of green bonds as collateral. They also touch on proposals to amend or introduce terms in refinancing operations that integrate climate change considerations.
The views presented in this chapter are those of the author and are not of the European Central Bank. They reflect monetary policy and legal developments as at November 2022. I would like to thank Chiara Zilioli, Bram van der Eem, Marguerite O’Connell and Caoimhe Cotter for comments on a draft of this chapter.
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Notes
- 1.
See further Ioannidis, Michael, Hlásková Murphy, Sarah Jane and Zilioli, Chiara, 2021. The mandate of the ECB: Legal considerations in the ECB’s monetary policy strategy review. Occasional Paper Series. No. 276, 21 September 2021. https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op276~3c53a6755d.en.pdf. Chiara Zilioli and Michael Ioannidis. 2022. Climate change and the mandate of the ECB: Potential and limits of monetary policy contribution to European green policies. Common Market Law Review 59(2):363–394. https://doi.org/10.54648/cola2022029. Accessed 30 November 2022.
- 2.
De Santis, Roberto A., Hettler, Katja, Roos, Madelaine and Tamburrini, Fabio. 2018. Purchases of green bonds under the Eurosystem’s asset purchase programme. ECB Economic Bulletin, Issue 7/2018. https://www.ecb.europa.eu/pub/economic-bulletin/focus/2018/html/ecb.ebbox201807_01.en.html. Accessed 30 November 2022.
- 3.
ECB. 2022. Press release—Monetary policy decisions. 8 September. https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.mp220908~c1b6839378.en.html. Accessed 30 November 2022.
- 4.
ECB. 2022. Press release—ECB takes further steps to incorporate climate change into its monetary policy operations. 4 July. https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220704~4f48a72462.en.html. Accessed 30 November 2022.
- 5.
ECB. 2022. Press release. ECB provides details on how it aims to decarbonise its corporate bond holdings. 19 September. https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220919~fae53c59bd.en.html. Accessed 30 November 2022.
- 6.
Proposal for a Regulation of the European Parliament and of the Council on European green bonds (COM(2021) 391 final). https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52021PC0391. Accessed 30 November 2022.
- 7.
Opinion CON/2021/30 of the European Central Bank of 5 November 2021 on a proposal for a regulation on European green bonds (OJ C 27, 19.1.2022, p. 4).
- 8.
Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13).
- 9.
Para. 3.2.2 of Opinion CON/2021/30. (n 8).
- 10.
Recital 16 of the proposed regulation. Para. 6.3 of Badenhoop, Nikolai. 2022. Green Bonds—An assessment of the proposed EU Green Bond Standard and its potential to prevent greenwashing. European Parliament Research Service. https://www.europarl.europa.eu/RegData/etudes/STUD/2022/703359/IPOL_STU(2022)703359_EN.pdf. Accessed 30 November 2022.
- 11.
European Commission. 2021. Press release. NextGenerationEU: European Commission gearing up for issuing €250 billion of NextGenerationEU green bonds. 7 September. https://ec.europa.eu/commission/presscorner/detail/en/IP_21_4565. Accessed 30 November 2022.
- 12.
Article 11 of the proposed regulation.
- 13.
See arguments in favour of a single standard for corporate and sovereign bonds in Section 6 of Badenhoop, Nikolai. 2022. Green Bonds—An assessment of the proposed EU Green Bond Standard and its potential to prevent greenwashing. European Parliament Research Service. https://www.europarl.europa.eu/RegData/etudes/STUD/2022/703359/IPOL_STU(2022)703359_EN.pdf. Accessed 30 November 2022.
- 14.
Decision (EU) 2022/1613 of the European Central Bank of 9 September 2022 amending Decision (EU) 2016/948 on the implementation of the corporate sector purchase programme (ECB/2016/16) (ECB/2022/29) (OJ L 241, 19.9.2022, p. 13).
- 15.
Article 127(1) (third sentence) of TFEU.
- 16.
Article 4(3) of Decision (EU) 2016/948 of the European Central Bank of 1 June 2016 on the implementation of the corporate sector purchase programme (ECB/2016/16) (OJ L 157, 15.6.2016, p. 28).
- 17.
Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (OJ L 322, 16.12.2022, p. 15–80).
- 18.
Para. 2.2.3 of Opinion CON/2021/27 of the European Central Bank of 7 September 2021 on a proposal for a directive amending Directive 2013/34/EU, Directive 2004/109/EC, Directive 2006/43/EC and Regulation (EU) No 537/2014, as regards corporate sustainability reporting (OJ C 446, 3.11.2021, p. 2).
- 19.
ECB. 2022. Press release. ECB to accept sustainability-linked bonds as collateral. 22 September. https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr200922~482e4a5a90.en.html. Accessed 30 November 2022.
- 20.
ECB. 2022. Press release—ECB takes further steps to incorporate climate change into its monetary policy operations. 4 July https://www.ecb.europa.eu/press/pr/date/2022/html/ecb.pr220704~4f48a72462.en.html. Accessed 30 November 2022.
- 21.
Article 19a of Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting (OJ L 322, 16.12.2022, p. 15–80).
- 22.
See ECB website. Eurosystem Collateral Data at https://www.ecb.europa.eu/paym/coll/charts/html/index.en.html. Accessed 30 November 2022.
- 23.
Article 14 of Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and covered bond public supervision and amending Directives 2009/65/EC and 2014/59/EU (OJ L 328, 18.12.2019, p. 29).
- 24.
Regulation (EU) 2016/867 of the European Central Bank of 18 May 2016 on the collection of granular credit and credit risk data (ECB/2016/13) (OJ L 144, 1.6.2016, p. 44).
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Hlásková Murphy, S.J. (2023). Discussion: Green Bonds and Monetary Policy. In: Ramos Muñoz, D., Smoleńska, A. (eds) Greening the Bond Market . EBI Studies in Banking and Capital Markets Law. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-38692-3_13
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