However, the bank will not sell bonds or exclude issuers even if a company receives a low climate score and it also will not disclose the climate score assigned to each firm.
Activist group Reclaim Finance, which campaigns for cutting finance to carbon-heavy industries, said the ECB was not going far enough. “The ECB’s plan means continued support to fossil fuel firms that are doing the most damage to both the environment and inflation,” Paul Schreiber, a campaigner at the group, said.
The ECB will look at each company’s past emissions and how these compare to peers. It will also consider objectives set by issuers to reduce their greenhouse gas emissions and will also look at the quality of climate related disclosures. “The will use the climate score to adjust its bids on the primary market to favour issuers with a better climate performance and to impose maturity limits on bonds from lower-scoring issuers,” the ECB added.