FAQs on Eurosystem climate-related financial disclosures

Since 2023, all central banks of the Eurosystem have published annual climate-related financial disclosures.

The responses to the following frequently asked questions (FAQs) provide information on these disclosures, including their scope, the data used and the methodology behind them.

Further details on Eurosystem members’ climate-related financial disclosures can be found in our press release and the dedicated section of our website.

Q1 Why does the Eurosystem publish climate-related financial disclosures?

Through its climate-related financial disclosures, the Eurosystem aims to enhance transparency about the climate impact of its financial portfolios and their exposure to climate risks. More broadly, these disclosures enhance awareness and understanding of climate risks across the financial sector and for financial portfolios, promote the harmonisation of disclosure practices by following evolving market standards, and support the European Union’s objectives of climate neutrality and transition to a low-carbon economy.

Q2 Which portfolios are covered by the climate-related financial disclosures?

All Eurosystem central banks disclose climate-related information on their non-monetary policy portfolios, which they manage under their own responsibility. In addition, the Eurosystem publishes climate-related financial disclosures for the public sector, corporate and covered bonds held for monetary policy purposes under the asset purchase programme (APP) and the pandemic emergency purchase programme (PEPP). The report on APP and PEPP holdings, published by the ECB, also includes a section on the ECB’s foreign reserves. The scope of climate-related financial disclosures is reviewed annually to reflect developments in data, disclosure methodologies and practices.

Q3 Why do you not disclose climate-related information for the entire balance sheet?

The Eurosystem discloses climate-related information for assets held on its balance sheet for which sufficient climate data are available. These disclosures cover most of our balance sheet items. Certain assets and portfolios, such as securities held under the asset-backed securities purchase programme (ABSPP), as well as holdings of physical gold, special drawing rights, and cash and cash equivalents in the ECB’s foreign reserves, are excluded from the scope, because not enough climate data or methodological guidance are available. The Eurosystem is engaging with standard setters and climate data providers to improve the availability and quality of climate data over time.

Q4 Which methodology is used for the climate-related financial disclosures?

The Eurosystem common disclosure principles were developed collectively by the Eurosystem members and focus on non-monetary policy portfolios. The principles, which are regularly reviewed and updated, are based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD was disbanded in October 2023 as its recommendations were incorporated in 2024 into the standards established by the International Sustainability Standards Board, an independent standard-setting body within the International Financial Reporting Standards Foundation (IFRS). The Eurosystem also takes into account the guidance from the Partnership for Carbon Accounting Financials (PCAF) and the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), which provide widely used and accepted standards for sustainability reporting. The principles have been adapted to fit the characteristics of Eurosystem non-monetary policy portfolios. The reports provide further details on the methodologies applied.

Q5 Do the climate-related financial disclosures also cover risks associated with nature loss and degradation?

Since 2025 some of the Eurosystem central banks, including the ECB, have added a nature-related indicator to the reports. This indicator measures the exposure of corporate holdings to sectors with material impacts or dependencies on nature, and it is recommended by the Taskforce on Nature-related Financial Disclosures. This metric is also disclosed for the Eurosystem’s monetary policy portfolios. As nature-related data improve, we intend to expand our disclosures in the coming years.

Q6 How does the reporting methodology for monetary policy asset holdings under the APP and PEPP compare with that for non-monetary policy portfolios?

Climate-related financial disclosures of public sector, corporate bond and covered bond holdings under the APP and PEPP largely follow the same methodology as that used for non-monetary policy portfolios based on the Eurosystem common disclosure principles. Any methodological differences reflect the monetary policy nature of the APP and PEPP portfolios and the ongoing integration of climate change considerations into the Eurosystem’s monetary policy framework. For example, corporate holdings in APP and PEPP disclosures rely on emissions data reported by issuers only, while climate-related financial disclosures for non-monetary policy portfolios may additionally rely on estimated emissions data from climate data providers where self-reported emissions data are unavailable.

Q7 What data do you use for your calculations?

For the 2026 reports, the Eurosystem relies on climate and financial data from one specialised provider: Institutional Shareholder Services (ISS). Due to the expiration of the contract with Carbon4 Finance (C4F), the ECB and most Eurosystem members now apply ISS data only, which has had a small impact on some historical trends for sovereign consumption emissions. A Eurosystem-wide reprocurement process led by the Deutsche Bundesbank that considered data quality, data coverage and cost-benefit aspects has led to the selection of two data providers that will be used for the next rounds of disclosures. In addition to data from these providers, Eurosystem members complement their climate-related financial disclosures with climate data from other data providers that are available to them.

Q8 Why are issuers’ decarbonisation data integrated with a significant time lag?

Issuers’ emissions data become available with a delay of one year for non-sovereign issuers and up to two years for sovereign issuers. For consistency reasons, the relative emission metrics use the financial data of the same year as that of the emission metrics. This leads to a mismatch between the reference year of the most recent holdings data and the historical climate (and financial) data. In order to still be able to report on the most recent portfolio holdings, the Eurosystem uses the latest available emissions data from each issuer in the calculation of the metrics. In each year’s report, past metrics are updated retrospectively for the year for which new climate data have become available.

Q9 Why do you use weighted average carbon intensity, total carbon emissions and the carbon footprint as metrics for disclosure?

The weighted average carbon intensity (WACI), total carbon emissions and carbon footprint are the three key metrics used in the Eurosystem common disclosure principles. They were all recommended for asset owners by the TCFD. Normalised metrics (such as the WACI and carbon footprint) and absolute metrics (such as total carbon emissions) complement each other and in combination provide a high degree of transparency regarding portfolios’ climate impact and exposure to climate risks. They benefit from a standardised methodology and are widely used in climate-related reporting across the financial sector. Eurosystem members may also choose to report other metrics to further enhance transparency.

Q10 Scope 3 relative metrics for non-sovereign issuers have been added this year. What are the pros and cons of this expansion?

This year the Eurosystem is reporting scope 3 relative emission metrics in the main body of the report, complementing the scope 3 absolute emissions reported previously. As defined by PCAF, scope 3 emissions are “all indirect emissions (not included in scope 2) that occur in the value chain of the reporting organisation, including both upstream and downstream emissions”. Disclosures on scope 3 emissions thus provide a more complete picture of the emissions associated with each investee. This is of particular importance for holdings in the financial sector, which have relatively small emissions from their own operations (scope 1 and 2) but large scope 3 emissions associated with loans and financial portfolios.

The two main limitations of disclosing scope 3 emissions concern data quality and the double-counting of emissions. First, scope 3 emissions data are reported less by companies and therefore estimated more by data providers than scope 1 and 2. Second, where companies are part of the same value chain, the same emissions are attributed individually to each company (e.g. scope 3 emissions for one company may be reported as scope 1 or 2 emissions by another company), resulting in overstated emissions. While this type of double-counting cannot be avoided, we provide additional transparency by reporting scope 3 metrics separately from scope 1 and 2, as advised by PCAF.

Q11 Since the relative metrics are normalised by financial values in euro, how does inflation influence them?

Traditional relative emissions metrics may overstate the decarbonisation progress, as they are calculated using a monetary value in the denominator (e.g. revenue). As an example, the WACI is the weighted average of the tonnes of CO₂ emissions per million euro of revenue. This means that if issuers’ revenues increase due to inflation, the WACI would naturally fall, overstating the decarbonisation progress of the portfolio. Boxes in this year’s ECB and Eurosystem disclosures published in 2026 provide a set of inflation-adjusted metrics that complement the unadjusted figures, based on current standards. The inflation adjustments are applied to production emission metrics for sovereign investments and to the WACI for corporate investments. With these boxes, the ECB aims to further increase the transparency of its climate reporting, which will be updated as further consensus on inflation adjustments emerges.

Q12 Why do you define emissions reduction targets and what do they mean exactly?

Targets are an integral element of the TCFD recommendations under the category “Metrics and Targets” and are an important part of climate-related financial disclosures. Targets help to steer and measure the reduction of a portfolio’s exposure to climate-related risks and to manage climate-related opportunities and the climate impact of asset holdings. All Eurosystem members strive to ensure that the non-monetary policy portfolios under their management, and their corporate bond holdings under the APP and PEPP, are on a path that supports the goals of the Paris Agreement and the EU’s climate neutrality objectives as set out in the European Climate Law. For some portfolios, long-term targets are supplemented by interim targets to outline a clear pathway towards reducing portfolio emissions. In this context, it should be noted that each Eurosystem member remains solely responsible for all aspects related to the management of its non-monetary policy portfolios. This includes the preparation of the climate-related financial disclosures and the definition of targets.

Q13 Why do you not disclose targets for all portfolios?

Setting credible targets to reduce portfolio emissions over time requires the flexibility to take action if a portfolio’s actual emissions reduction deviates from the desired pathway. However, portfolio and asset class-related restrictions may not provide for this flexibility. Portfolio restrictions may, for example, be related to monetary policy considerations or a passive investment style (including hold-to-maturity portfolios). In addition, some asset classes currently lack a credible framework for emissions reduction.

Q14 How did the Eurosystem follow up on its commitment to introduce interim targets for corporate sector portfolios? What are these targets?

The Governing Council decided in 2024 that interim emissions reduction targets would be set for the aggregate corporate portfolios in the APP and PEPP, and announced the interim target in 2025. This interim target applies to the aggregate corporate portfolios of the APP and PEPP and takes into account, in the form of guidance, the requirements of the EU Benchmarks Regulation and accompanying Commission Delegated Regulation. Without prejudice to its price stability mandate, the Eurosystem has carefully designed a framework that covers all relevant elements for the definition of credible interim emissions reduction targets which support the goals of the Paris Agreement and the EU’s climate neutrality objectives as set out in the European Climate Law.

With this framework, the Eurosystem is targeting a decarbonisation trajectory consistent with achieving carbon neutrality for its corporate bond portfolios by 2050^[1], in line with the Paris Agreement objective of limiting global warming to well below 2° Celsius (while pursuing efforts to limit it to 1.5° Celsius).

To support this long-term trajectory, the Eurosystem aims to reduce the weighted average emissions intensity^[2] associated with its aggregate corporate portfolios by an average of at least 7% per year, starting from the end of 2021^[3], as an interim target. The Eurosystem will monitor progress towards this interim target and will also consider the impact of inflation on the portfolios’ emissions intensity trajectory. If deviations from the desired average decarbonisation trajectory are identified for the aggregate corporate portfolios, the Eurosystem will assess remedial actions on a case-by-case basis and within the limits of its mandate.

Particularly after the end of the reinvestment phase that began at the end of 2024, the decarbonisation path of the corporate bond holdings depends on several developments that are outside of the Eurosystem’s control. These include issuers’ effectiveness in decarbonising their operations as indicated in their plans, the changing composition of the portfolio holdings during the run-off phase and the corporate actions (which can lead, for instance, to early redemptions). However, it is worth noting that remedial action would not be considered in response to deviations by individual issuers but only if the average decarbonisation rate for the aggregate portfolios fell short of the desired trajectory.

Q15 Do the interim targets for corporate sector portfolios apply at the portfolio or individual company level?

Interim emissions reduction targets for corporate sector portfolios apply to the aggregate APP and PEPP holdings. The ECB does not set emissions reduction targets for individual companies. Setting interim targets at the portfolio level is common practice among asset owners.

Q16 Will you further develop interim and quantitative targets?

Eurosystem members may choose to rely on a qualitative long-term target, considering the specific objectives for and constraints on the Eurosystem’s portfolios, the ongoing development of net-zero investment frameworks for central banks, their recent but increasing experience with newly procured data sources and rapidly evolving climate science. Eurosystem members will regularly review the disclosure practices and may choose to add interim and quantitative targets as appropriate. For some Eurosystem non-monetary policy portfolios, interim targets have already been added to complement the long-term targets. If available, these interim targets are set out in the “Metrics and targets” section of the respective climate-related financial disclosures.

Q17 What are the goals of the Paris Agreement and the EU’s climate neutrality objectives?

The Paris Agreement sets out a global framework to limit global warming to well below 2°C, and preferably to 1.5°C, compared with pre-industrial levels. In accordance with its commitment to the goals of the Paris Agreement, the EU aims to be climate-neutral by 2050. To this end, the EU adopted the European Climate Law, which sets a legally binding target of net-zero greenhouse gas emissions by 2050 for the EU as a whole. The law also sets the interim target of reducing net greenhouse gas emissions by at least 55% by 2030, compared with 1990 levels. We strive to ensure that our non-monetary policy portfolios and corporate bond holdings are on a path that supports the goals of the Paris Agreement and the EU’s climate neutrality objectives, and we will regularly monitor our progress towards achieving our climate goals as set out in the European Climate Law.

Q18 How do you measure progress towards achieving climate goals?

Our progress towards achieving our climate goals is measured via the evolution of specific metrics over time. Which metric we look at in the assessment depends on the portfolio, asset class and climate goal under consideration. For example, the progress achieved in reducing the emissions associated with a portfolio would typically be assessed based on metrics such as the portfolio’s WACI or the carbon footprint, while the progress achieved in funding the net-zero transition would be assessed based on the portfolio’s share of green bonds.

Q19 Will you continue to publish regular climate-related financial disclosures?

The Eurosystem is committed to publishing these disclosures on an annual basis and will regularly review all elements of its common disclosure principles to further improve the quality of the disclosures and ensure they are fit for purpose. Elements that will be subject to regular review include the portfolios included in the reporting, the reported metrics and targets, and data quality and availability.

The Eurosystem already published climate-related financial disclosures in 2023, 2024, 2025 and 2026.