ECB Toughens Up on Climate Risks with Collateral Framework Overhaul

The European Central Bank (ECB) has taken a tougher stance on climate risks by extending the use of climate factors in its collateral framework.

Policymakers at the Frankfurt-based institution announced that they would consider climate factors when evaluating the quality of collateral used to secure liquidity, particularly for non-financial corporate credit claims.

This move is aimed at addressing potential climate-related risks and promoting more sustainable practices within the financial sector.