The availability of better data could, in turn, underpin harmonised climate-related disclosures. There is substantial scope for progress on these fronts and the ECB could lend crucial support to initiatives in these areas. For example, we have already committed to enhancing our own climate-related disclosures by measuring greenhouse gas emissions and other sustainability metrics of our activities, starting with our non-monetary policy portfolios. [23] This endeavour builds on the extensive work that has already been conducted by the Network for Greening the Financial System (NGFS), chaired by my colleague Frank Elderson, and the Task Force on Climate-related Financial Disclosures (TCFD). [24] Furthermore, we could amend our collateral framework, for example by including innovative financial products as eligible collateral, as we have recently done with the acceptance of sustainability-linked bonds [25], or by linking the eligibility as collateral to more comprehensive disclosures, reflecting European legislation such as the Corporate Sustainability Reporting Directive (CSRD). Such a step could support the development of consistent disclosure practices across Europe. There is also scope to incorporate climate risks into our stress tests, both in our own risk management practices and in our supervisory activities. The ECB is currently conducting a comprehensive top-down stress test to evaluate the risks associated with economy-wide climate exposures. [26] In 2022, the ECB will complement this work by carrying out a separate supervisory climate stress test of individual banks. [27] Finally, central banks can contribute to cutting-edge academic research on the macroeconomic ramifications of climate change.

The ECB’s research department is working on an ambitious climate  change research agenda and aims at further intensifying the exchange with other central banks and with the academic community. This Symposium is an example of institutional collaboration that advances the current frontier of knowledge. These considerations have three important implications for the ECB. First, central banks have a range of instruments at their disposal. While our mandate imposes certain restrictions on our ability to act, combining some or all of these instruments could serve as a powerful contribution to accelerating the green transition. Second, despite the variety of the instruments in the toolkit, they all have one thing in common: they show that central banks can act as a catalyst and thought leader by prompting other financial market participants to pre-emptively enhance their analysis of and resilience to climate risks. Third, the array of possible tools suggests that central banks should employ an all-encompassing approach in adjusting their instruments and monetary policy framework to enhance climate protection, within the remit of their respective mandate. This includes scrutinising well-established conceptual frameworks that have previously guided the implementation of our monetary policy. In the context of the ECB’s asset purchases, the shortcomings of the market neutrality principle illustrate the need to reconsider the merit of previous practices that may be at odds with fostering the transition to a carbon-neutral economy. From market neutrality to market efficiency So far, the market neutrality principle has guided the implementation of our private sector asset purchase programmes.