On 15 June 2026, the European Central Bank (“ECB“) began applying a new climate factor within its collateral framework for marketable assets issued by non-financial corporations. The measure was introduced following a decision of the ECB Governing Council and aims to strengthen the protection of the Eurosystem against climate-related transition risks that may affect the value of assets used as collateral by banks. Further information is available in this report and this article.

The new approach complements the ECB’s existing risk management framework. When banks provide eligible corporate bonds as collateral in exchange for central bank liquidity, the ECB may now apply additional adjustments reflecting the issuer’s exposure to climate-related uncertainties. In practice, institutions holding bonds issued by companies more vulnerable to the low-carbon transition may receive lower borrowing capacity against those assets.

According to the ECB, traditional collateral valuation methods rely heavily on historical market data, which may not adequately capture the unprecedented and forward-looking impacts of climate change. The climate factor therefore incorporates scenario analyses and other indicators designed to better reflect the potential consequences of policy changes, technological developments and shifts in consumer preferences associated with the green transition.

While the ECB expects the immediate impact on banks to remain limited, the measure represents another important step in the integration of climate-related financial risks into monetary policy operations. It also sends a strong signal to financial markets that climate transition risks are increasingly regarded as a relevant financial risk factor.