Climate campaigners on Wednesday gathered at the headquarters of the European Union's central bank in Frankfurt, Germany to demand that it stop financing the fossil fuel industry, building on months of criticism targeting the bank for "playing both firefighter and arsonist" by purchasing bonds from polluters as part of its response to the coronavirus pandemic.
Activists with the climate justice group Koala Kollektiv set fire to a model planet Earth outside the European Central Bank (ECB) "to symbolize the destruction" caused by its support for fossil fuels. At the protest, which coincided with an "ECB Listens" event allowing for input from civil society groups, protesters held up a banner which said, "ECB, stop heating up the climate crisis!"
"Stopping climate change is the most urgent challenge of our time," a spokesperson for the Koala Kollektiv said in a statement. "If we fail to meet the Paris climate targets, humanitarian crises such as famine and wars over resources will become a constant reality in this century."
While some activists and scientists have criticized the 2015 Paris climate agreement for not going far enough, experts worldwide have also warned that the international community must pursue "rapid, far-reaching, and unprecedented" changes to meet its goals—and failing to do so over the next decade could result in "climate catastrophe."
— Bloomberg QuickTake (@QuickTake) October 21, 2020
"We demand that the ECB stops giving money to industries that threaten our future," added the Koala Kollectiv spokesperson. "That means: getting out of coal, oil, gas, and combustion engines. In particular, the billions spent to respond to the Corona crisis should not add fuel to the climate crisis. Instead, the ECB must promote a socio-ecological transformation of our economy."
For months, climate advocacy groups have pressured ECB President Christine Lagarde and the bank's Governing Council to align its Covid-19 economic stimulus package and other policies with the Paris goals. Over 165,000 Europeans have signed a petition from 350.org, Reclaim Finance, and SumOfUs urging the ECB to "put our planet before big polluters" and "stop financing climate chaos."
The petition calls for a green recovery that incorporates bold climate policies into the bank's pandemic relief and recovery efforts. SumOfUs senior campaigner Leyla Larbi explained that "Europeans do not want a return to 'normal,' where profit reigns supreme at the expense of our climate, our health, and a real social justice for all."
"And the European Central Bank has a chance to listen by ending their position of 'market neutrality' that does nothing more than prop up dirty fossil fuel companies like Total and Shell," Larbi said. "We know they are reviewing their position, we know they are aware of the massive outcry, but now it is time to act."
As Bloomberg reported last week:
The European Central Bank must question whether mirroring the composition of the bond market in its asset purchases is appropriate in light of climate risks, according to President Christine Lagarde.
Her argument centers on whether investors are correctly pricing bonds issued by polluting companies. With the European Union pushing an aggressive agenda to make the continent climate-neutral by the middle of the century, those assets might drop in value, posing a risk to the central-bank balance sheet.
The ECB is currently assessing how it conducts policy, looking at issues from inflation measurement to climate change.
"President of the ECB, Christine Lagarde has said the bank should 'explore every avenue' to tackle the climate crisis, but the bank is purchasing bonds from some of the world's worst climate criminals through its trillion-euro Covid recovery package," 350.org campaigner Nick Bryer said Wednesday. "The ECB is 'listening' to civil society today, but the truth is that they already know what they need to do—stop financing climate-wrecking companies like Total and Shell."
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During the "ECB Listens" event, climate activists such as Greenpeace campaigner Adam Pawloff also "urged the central bank to abandon its principle of neutrality, whereby its bond purchases mirror the make-up of the market, helping to reduce financing costs for large polluters," according to Bloomberg.
On Tuesday, Greenpeace Central and Eastern Europe, the New Economics Foundation, SOAS University of London, the University of the West of England, and the University of Greenwich released a report—entitled Decarbonizing Is Easy: Beyond Market Neutrality in the ECB's Corporate QE (pdf)—revealing how the so-called neutrality policy "actually skews the bank's corporate bond purchases in favor of carbon-intensive industries."
The analysis found that as of the end of July, the ECB held bonds in major polluters including Eni, OMV, Shell, and Total. In fact, nearly 63% of the bonds held by the bank were tied to "carbon-intensive sectors" such as fossil fuels, energy-intensive manufacturing, non-renewable utilities, and carbon-intensive transport.
— Greenpeace EU (@GreenpeaceEU) October 20, 2020
In a statement about the report, Greenpeace International executive director Jennifer Morgan asserted that the ECB Governing Council "must adapt its monetary policy, stop buying bonds from big polluters, and support the transition to a green and just world."
Reclaim Finance campaigner Paul Schreiber echoed that message Wednesday and declared that "the voices of climate activists in Frankfurt echo those of more than 160k Europeans that have petitioned the ECB, reminding it that we must act now to face the climate emergency."