Our ongoing strategy review provides an opportunity to reflect on the adequacy of concepts such as the market neutrality principle and to explore ideas for other benchmarks that could guide the implementation of our asset purchases. A transition from the market neutrality principle to the market efficiency principle would be an important step in acknowledging the presence of climate externalities. However, the consequences of any potential policy initiatives need to be thoroughly evaluated against the limitations stipulated by the Treaties. Our measures must always remain without prejudice to our primary mandate of safeguarding price stability. The joint ECB/CEPR/EBRD Symposium offers a timely opportunity to discuss the immense challenges posed by climate change. We look forward to hearing your views on how all of us – academics and policymakers alike – can contribute to understanding and tackling one of the greatest challenges of our time. Thank you for your attention. 1. I would like to thank Agnese Leonello and Jean-David Sigaux for their contributions to this speech. 2. Additional information on EU climate initiatives and the European Green Deal is available here. 3. See Schnabel, I. (2020a), “Never waste a crisis: COVID-19, climate change and monetary policy”, 17 July. 4. See Lagarde, C. (2021), “Towards a green capital markets union for Europe”, 6 May. See also Panetta, F. (2021), “Sustainable finance: transforming finance to finance the transformation”, 25 January. 5. Banks seem to increasingly factor in climate-related risks, for example by pricing climate-related policy exposures in their loan portfolios and reducing lending to polluting companies and projects.

SPEECH  From market neutrality to market efficiency Welcome address by Isabel Schnabel, Member of the Executive Board of the ECB, at the ECB DG-Research Symposium “Climate change, financial markets and green growth” Frankfurt am Main, 14 June 2021 On behalf of the European Central Bank (ECB) and the co-organizers – the Centre for Economic Policy Research (CEPR) and the European Bank for Reconstruction and Development (EBRD) – I am pleased to welcome you to the Symposium “Climate Change, Finance and Green Growth”. While all of us would certainly have preferred to convene in person, the event’s virtual format does at least have the welcome side effect of lowering our carbon footprint. The programme of the Symposium is highly topical: it features six state-of-the-art academic papers and a moderated discussion focusing on the interaction between climate policies, financial markets and sustainable development. The Symposium underscores the ECB’s commitment to better understand the consequences of climate change for output and inflation, to explore the role that central banks can play in fostering the transition to a low-carbon economy, and to support high-quality academic research on climate change. In view of the Symposium’s agenda, my opening remarks will focus on the scope for the ECB to contribute to the global fight against climate change. While this topic is also an important element of the ECB’s ongoing monetary policy strategy review, my remarks should not be seen as an indication of its eventual outcome.