Environmental and Social Sustainability in the Mandate of the European Central Bank

Central banks are promising a more climate-based focus on matters ranging from communication to prudential regulation and supervision, including monetary policy. The chapter examines the various arguments that analyze whether the European Central Bank (ECB) can tackle climate change, in light of its mandates. In our view, climate change fits within the narrower central bank mandates, focused on price stability, while other ‘peripheral’ mandates and ‘transversal’ environmental principles can play a supporting role. Prudential regulation and supervision can also be a main point for assimilation. Finally, we examine the considerations of courts of climate change when scrutinizing governmental action and compare them to the considerations of courts of ECB acts. We conclude that the integration of sustainability considerations, and especially climate change, into the ECB price stability mandate seems to be on relatively firm legal ground.