The European Central Bank (ECB) has published its fourth annual suite of climate-related financial disclosures, providing a comprehensive assessment of the carbon footprint and environmental risk exposures across the Eurosystem’s monetary and non-monetary asset portfolios.
The report covers the central bank’s core monetary policy portfolios, foreign currency reserves, the internal staff pension fund, and its own funds portfolio.
Aggregate greenhouse gas emissions tied to the Eurosystem’s monetary policy assets and the ECB’s foreign reserves decreased in absolute terms throughout 2025. This reduction was primarily driven by the ongoing structural run-off of these portfolios, which contracted by 13 per cent over the course of the year.
The ECB confirmed that the Eurosystem remains on track to achieve its interim relative carbon intensity reduction targets for the corporate bonds held under its monetary policy frameworks, aligning with the objectives of the Paris Agreement.
However, the central bank noted that because the passive run-off limits its ability to actively tilt asset reinvestments towards corporate issuers with superior climate credentials, subsequent decarbonisation progress will rely directly on emission reductions executed by the issuing corporations themselves.
To enhance the transparency of its disclosures, the ECB introduced two major data reporting modifications:
- Inflation-adjusted carbon metrics: The bank is reporting inflation-adjusted metrics for the first time to prevent macroeconomic price distortion. Rising inflation can artificially lower a portfolio’s apparent carbon intensity by increasing nominal corporate revenues, which serve as the denominator in standard intensity equations. The new adjusted metrics isolate price increases to reflect actual, operational decarbonisation trends.
- Scope 3 value chain disclosures: For the first time, the disclosures incorporate relative metrics for Scope 3 emissions across all non-sovereign asset holdings. Acknowledging that these indirect supply chain emissions constitute the bulk of corporate climate footprints, the ECB stated that improved data availability and reporting coverage allowed for their inclusion despite persistent data limitations.
The ECB’s staff pension fund recorded a further decline in the relative carbon footprint of its corporate assets in 2025, maintaining its target trajectory. Concurrently, the share of green bonds within the ECB’s own funds portfolio advanced to 33 per cent at the end of 2025, representing a total capital allocation of €7.6 billion towards green transition projects. The bank aims to scale the green bond allocation to 35 per cent in 2026.
Beyond climate metrics, the disclosure maintained reporting on the exposure of ECB portfolios to sectors with significant dependencies or impacts on ecosystem services, aligning with framework criteria established by the Taskforce on Nature-related Financial Disclosures (TNFD). The central bank stated it will continue to monitor nature-related data quality with the intent of expanding biodiversity disclosures as global reporting standards mature.
