ClientEarth has filed legal action to stop ‘quantitative easing’ from European central banks to fossil fuel companies and polluting firms.
The action challenges a programme developed by the European Central Bank (ECB) and implemented by the central banks of Belgium, Germany, France, Spain, Italy and Finland.
Currently €266 billion worth of corporate bonds are held under the programme, and research suggests that well over half of those bonds have been issued by companies in carbon-intensive sectors.
ClientEarth’s lawsuit against Belgium’s central bank asks for a question to be referred to the EU’s top court.
That question would ask the court to decide whether the ECB’s purchase programme is valid or invalid, in order to determine whether the Belgian National Bank’s actions carried out under that policy are legal.
If found to be invalid, ClientEarth asks the court to order the Belgian central bank to stop purchasing bonds under the programme. The ECB would have to take all measures appropriate to remedy the illegality.
ClientEarth lawyer Jamie Sawyer said: ‘By buying up carbon-intensive bonds, the Belgian National Bank is providing some of Europe’s worst polluters with access to cheap finance and facilitating the expansion of their climate-damaging activities.
‘Central banks in the EU are legally obliged to contribute to the protection of our environment and respect human rights, but instead, they are directing capital into sectors that contribute the most to climate change. This flies in the face of the bloc’s commitments to mitigate the climate crisis and drastically reduce greenhouse gas emissions.
‘The ECB needs to stop using the myth of ‘market neutrality’ to justify purchasing assets of climate-wrecking companies and must take immediate action to align its monetary policy with the goals of the Paris Agreement.
‘We urge the ECB’s Executive Board and Governing Council not to waste the significant opportunity provided by the strategy review to ensure the central bank’s purchasing programme works to mitigate climate change, rather than contribute to it.’
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