ECB to Extend Climate Factors in Collateral Framework to Non-Financial Corporate Credit Claims

The European Central Bank (ECB) announced on 24 July 2026 that it will extend the use of climate factors in the Eurosystem collateral framework to certain eligible credit claims whose debtor is a non-financial corporation. This measure aims to protect the Eurosystem against potential declines in collateral value due to climate-related transition shocks, such as policy changes, technological shifts, or litigation. The climate factor will be based on an asset-level uncertainty score incorporating sector-level stressor data from the latest Eurosystem climate stress test, the debtor's transition risk exposure, and the residual maturity of the credit claim. The maximum additional reduction in collateral value will be 5%. Implementation is expected by the end of 2027 at the earliest, with climate factor values updated annually. This builds on a similar framework for marketable assets introduced in July 2025 and effective from June 2026.