Climate change has profound implications for price stability through its impact on the structure and cyclical dynamics of the economy and financial system. For that reason, the Governing Council is committed to ensuring that the Eurosystem fully takes into account, in line with the EU’s goals and objectives, the implications of climate change and nature degradation for its primary mandate...

In this respect, the ongoing legislative process to amend certain corporate sustainability reporting and due diligence requirements (the “Omnibus proposal” 6 ) has significant implications for the Eurosystem. As explained in the recent ECB opinion on the Omnibus proposal, the ECB’s planned climate-related measures may be affected by the proposed amendments to the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). In particular, the proposed reduction in the scope of undertakings subject to sustainability reporting requirements under the CSRD would limit the availability of firm-level data, thereby weakening the Eurosystem’s ability to perform a granular assessment of climate-related financial risks on its balance sheet and within its collateral framework. Moreover, the amendments to the CSRD and CSDDD could hinder the Eurosystem’s ability to implement measures, as could delays in the transposition of the CSRD into the national laws of euro area Member States. It is therefore important that these amendments strike the right balance between retaining the benefits of sustainability reporting for the European economy and the financial system while also ensuring that the requirements are proportionate.