The European Central Bank (ECB) is to start running down its €5tr portfolio of bond holdings but will favour bonds issued by greener companies.

ECB said, in a statement, that its “Governing Council decided on stronger tilting of corporate bond purchases during partial reinvestment, including in primary market, towards issuers with better climate performance”. The strategy is in keeping with the Governing Council’s climate action plan, and it believes this will support the gradual decarbonisation of the Eurosystem’s corporate bond holdings, in line with the goals of the Paris Agreement.

It says it wants to redeem €15 billion per month on average until the end of June 2023 and its subsequent pace will be determined over time.

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