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ClientEarth Communications

31st January 2022

Climate finance

Why we’re going back to Court against the Belgian National Bank

Last year, we took landmark legal action to stop European central banks from directing cheap finance to some of Europe’s worst polluters.

Our case, which challenged the Belgian National Bank, argued that its purchases of carbon-intensive bonds issued by climate-wrecking companies are illegal, and breach the bank’s environmental protection and human rights obligations.

Unfortunately, the Brussels court of first instance rejected our arguments on procedural grounds. So a key question remains unanswered: is the European Central Bank’s Corporate Sector Purchase Programme (CSPP) – the policy under which these bonds are bought – legally valid?

To get an answer, ClientEarth is now appealing the Brussels court’s decision. We maintain that the CSPP was designed without taking into account climate considerations as required by EU law; is inconsistent with EU climate policy; and undermines the bloc’s emissions reduction targets – making it invalid.

Consequently, we continue to argue that the Belgian National Bank’s purchases are illegal and must be stopped.

Through the CSPP, the Belgian National Bank and five other central banks in Europe are buying up huge volumes of bonds issued by companies that are exacerbating the climate crisis, including fossil fuel firms Shell, Eni, EDP and Schlumberger.

This effectively subsidises heavily polluting industries and allows companies to continue their climate damaging businesses with no strings attached.

To stop these purchases from impeding further on the economic transition, we will again ask for a question on the validity of the corporate bond purchase policy to be referred to the EU’s top court.