ECB reports 2025 portfolio emissions fell as bond holdings shrank; adds new climate metrics

The European Central Bank said Monday that carbon emissions linked to its portfolios fell again in 2025, mainly because those holdings kept shrinking as the central bank allowed past bond-buying portfolios to run off. According to the ECB’s press release, emissions tied to the Eurosystem’s monetary policy portfolios and the ECB’s foreign reserves “continued to decline in absolute terms,” mainly because those portfolios declined by 13% in 2025.

The ECB said it had published “for the fourth time a set of climate-related financial disclosures,” continuing an annual reporting exercise that began in 2023. Those disclosures cover monetary policy assets, foreign reserves and the ECB’s own non-monetary portfolios. The ECB also said the Eurosystem remained on track in 2025 to meet its interim emissions-reduction targets for corporate bonds held for monetary policy purposes, measured by relative carbon intensity. That target is to cut weighted average carbon intensity by an average of at least 7% per year from the end of 2021.

This year’s disclosures add two new measures. “To further improve transparency, the ECB is reporting a set of inflation-adjusted emissions metrics for the first time,” the press release said, a change meant to correct for inflation’s effect on nominal carbon-intensity denominators. The ECB also reported relative scope-3 emissions metrics for non-sovereign, or corporate, holdings for the first time. Scope-3 emissions generally refer to indirect emissions across a company’s value chain. The ECB said data limitations remain, and that the new scope-3 figures are reported on a best-effort basis and may be revised.

In the ECB’s non-monetary portfolios, the central bank said the relative carbon footprint of corporate assets in its staff pension fund declined further in 2025, keeping that portfolio on track toward its climate targets. The ECB also said the share of green bonds in its own-funds portfolio rose to 33% at the end of 2025, and that those holdings channelled 7.6 billion euros, or about $8.2 billion at current exchange rates, toward the green transition. It said it aims to raise that share to 35% in 2026.

The ECB’s Annual Accounts 2025 show the own-funds portfolio was worth 23.1 billion euros at the end of 2025. The same accounts show the green-investment share increased from 28% at the end of 2024 to 33% a year later.

The decline in portfolio-linked emissions comes with an important caveat: the ECB said the main reason was balance-sheet run-off, not simply cleaner underlying issuers. That run-off reflects earlier policy decisions to stop reinvestments under the Asset Purchase Programme, a bond-buying scheme, from July 2023 and to fully discontinue reinvestments under the Pandemic Emergency Purchase Programme at the end of 2024. As those portfolios get smaller, the emissions associated with them can fall too.