On June 12, 2025, the European Central Bank (ECB) released its third set of climate-related financial disclosures, detailing the carbon footprint and climate risk exposures of the Eurosystem's various monetary policy portfolios, as well as the ECB’s foreign reserves and non-monetary policy portfolios.

This year's report introduces a new indicator designed to assess nature-related dependencies and impacts, reflecting a growing awareness of the interconnectedness between climate change and nature loss.

The data indicates that approximately 30% of the Eurosystem’s monetary policy corporate bond holdings are concentrated in high-risk sectors including utilities, food, and real estate.

Meanwhile, the ECB's own funds portfolio, including its staff pension fund, shows varying exposure levels, with 40% of equity investments in exchange-traded funds (ETFs) linked to sectors affecting nature.

The ECB noted that emissions associated with the Eurosystem's monetary portfolios continued to decline in both absolute and relative terms across most asset classes.

A climate stress test reaffirmed that corporate bonds remain the most susceptible to climate risks, emphasizing the ECB's commitment to redirect investments toward issuers demonstrating better climate performance.

Notably, the ECB's tilting strategy contributed to roughly one-quarter of the total emission reductions achieved in its corporate bond holdings since 2021, although reinvestments were curtailed from mid-2023 onward.

In conjunction with its climate action strategies, the Governing Council of the ECB established interim emission reduction targets for corporate portfolios under the asset purchase program (APP) and the pandemic emergency purchase program (PEPP), setting an annual emission intensity reduction target of 7%.

This initiative seeks to align portfolio management with the Paris Agreement and EU climate neutrality goals.

The share of green bonds in the ECB's own funds portfolio increased from 20% to 28% in 2024, directing over €6.4 billion towards green initiatives, with plans to boost this share to 32% by 2025.

Challenges persist in realizing meaningful climate disclosures, particularly regarding data coverage, standardization, and comparability across sectors.

The inconsistency in emissions reporting, especially concerning the entire value chain of issuers, complicates effective comparisons over time.

The ECB and Eurosystem are focused on enhancing the depth and reliability of their climate disclosures amidst ongoing advancements in relevant data availability.

In related developments, the ECB also published its structural financial indicators, revealing a continued decline in the number of bank offices across the EU, which decreased by an average of 3.41% by the end of 2024. Data shows that there were 127,264 bank offices in the EU, with 82.09% situated in the euro area.

This decline in physical banking infrastructure contrasts with a modest average employee increase of 1.05% across the EU banking sector, marking a second consecutive year of growth in bank employment since 2008.

The report highlighted significant disparities in banking sector concentration across EU Member States, with the share of assets held by the five largest credit institutions ranging from 34.1% to 96.01%.

The average for the EU as a whole stood at 68.61% at the end of 2024, indicating that market consolidation remains a pressing issue.

The ECB continues to emphasize the need for harmonized regulatory frameworks to foster a more integrated banking sector and capital markets, which are deemed essential for sustaining economic growth and financial stability across the region.