“Climate change and monetary policy in the euro area”

In July 2021 the ECB, upon completion of its strategy review, announced that climate change considerations will now be included in its monetary policy framework. Francesco Drudi, who was closely involved in the strategy review, will present the action plan underlying the ECB’s commitment to more systematically reflect environmental sustainability considerations in its monetary policy. In particular, he will discuss how the ECB will support governments’ and regulators’ plans to mitigate the macroeconomic and financial risks which arise from physical climate change and transition efforts; how macroeconomic modelling needs to expand in order to better project these climate-related risks; and how climate change considerations will be included in monetary policy operations in the areas of disclosure, risk assessment, collateral framework and corporate sector asset purchases.