(Bloomberg) -- Belgium’s central bank was sued by environmental campaigners who allege its participation in a corporate bond buying program to help boost the euro-area’s economy is “fueling the climate crisis.”
ClientEarth filed the suit at Brussels’ French-speaking court of first instance last week, according to a phone interview and statement on Tuesday.
The group is asking the Belgian court to stop corporate sector purchases which could require the European Central Bank to set tougher conditions on what companies central banks acquire assets from.
The ECB has bought corporate bonds since 2016 as part of its efforts to support the economy and return inflation to its goal of below but close to 2%. Climate groups are critical of the program, which they say favors carbon-intense debt, and have called on the institution to eliminate such bonds from its portfolio.
While policy makers have acknowledged the concerns, they haven’t yet lined out their response, highlighting the need for further debate. ECB President Christine Lagarde has made addressing climate change a key plank in the bank’s strategic review, an exercise that’s set to conclude in the second half of the year.
ClientEarth says it will also ask to push the case to the European Union’s top court which could potentially rule on whether the ECB’s purchase program is valid.
“We argue that the ECB’s decision establishing the program failed to assess the climate impact of buying these corporate assets despite its legal obligations to do so,” ClientEarth said.
The National Bank of Belgium said it was “very difficult” to comment on the case. Pierre Wunsch, its governor, said last week that the ECB doesn’t have the right tools to fight climate change.
The ECB declined to comment.
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