Photo by Arvind Vallabh on Unsplash
The European Central Bank (ECB) is indirectly supporting biodiversity loss by supporting fossil fuel companies operating in critical nature areas, a report claims.
The report by French thinktank Reclaim Finance shows that the ECB holds assets and accepts collateral from companies whose activities threaten biodiversity, while supervised eurozone banks provided US$161bn to these companies between 2021 and 2025.
One in 10 bonds in the ECB’s corporate monetary portfolios are tied to companies with fossil fuel activities in critical biodiversity areas, Reclaim Finance claims. These include bonds from oil giants such as TotalEnergies and BP, whose oil and LNG projects threaten key nature areas such as the Coral Triangle.
The study also finds that banks have been able to pledge collateral from at least 20 companies with fossil fuel projects in biodiversity areas since March 2025.
Reclaim Finance central banks campaigner Clarisse Murphy said that while the ECB is paying more attention to nature, it’s ignoring the impact that fossil fuels have.
“It makes no sense to recognise biodiversity is essential for financial and price stability while at the same time enabling financing for companies involved in fossil fuel activities which threaten some of the most critical areas around the world,” she said.
The report findings come even as the ECB continues to note the impact of nature on the financial system. ECB executive board member Frank Elderson warned in August that more work is needed to assess the risk of ecosystem collapses on the wider economy.
Dual mandates
The report from Reclaim Finance recommends that the ECB do more on biodiversity loss, including adopting a double materiality approach to risks, excluding all of the assets tied to companies with fossil fuel activities in critical biodiversity areas and requiring banks to include a roadmap to stop financial support for projects that create significant damage to key ecosystems.
However, the issue is whether the ECB has the mandate to do more.
The ECB’s primary mandate is to maintain price stability. In the context of climate change, that means accounting for its risks to inflation and the overall economy.
Its secondary mandate is to support the general policies of the EU, which include reaching net zero by 2050. However, the ECB can only support the secondary mandate if it does not conflict with its main objective of maintaining price stability.
These mandates have led the ECB to implement measures that account for climate risks, such as tilting its asset purchases towards issuers with better climate credentials, adding a climate factor to its collateral framework and requiring banks to adequately manage climate risks and sanctioning them if they do not.
But going a step further and excluding certain issuers over specific issues, such as biodiversity loss or fossil fuels, would conflict with the ECB’s primary mandate, an official familiar with the issue said. Under EU law, the ECB is unable to tell banks who it is able to lend to.
Mandates also vary by central bank. There are some, such as the Bank of England, which have banned assets linked to coal. Others argue that price stability gives supervisors such as the ECB the authority to do more.
Biodiversity loss is not only a core sustainable finance issue but speaks to the core mandates of central banks, including safeguarding financial and price stability and shock absorption, Maud Abdelli, green finance lead at WWF Switzerland, wrote in the report’s foreword.
“As the ECB continues to advance its work on nature-related risks, there is an opportunity to deepen the discussion on how financial institutions and financial policies may contribute to, or help reduce, pressures on biodiversity.”
This page was last updated September 9, 2026
Written by
Moriah Costa is the Editor-in-Chief of Green Central Banking and has over a decade of experience writing about banking and finance. She is an award-winning American journalist based in Paris and has written for major international publications, including Reuters, The Guardian, and S&P Global. Having grown up in water-stressed Arizona, she has always had a strong interest in bringing awareness to climate and environmental issues.
