Press release: 3 December 2021

Questions on legality of ECB lending remain after climate case ruling

Questions remain over the legality of bond purchases by European central banks, that result in finance flowing to companies exacerbating the climate crisis, following a judgment in ClientEarth’s lawsuit.

A Brussels court has found ClientEarth’s world-first case against the Belgian National Bank (BNB) over its implementation of the corporate bond purchase programme to be unsuccessful on procedural grounds.

In April, ClientEarth lawyers challenged the bank for breaching its legal obligations to take into account environmental protection and human rights requirements when buying corporate bonds. This week, the court dismissed ClientEarth’s claim and refused to refer a question on the validity of the purchasing programme to the European Court of Justice.

During a court hearing, ClientEarth argued that the programme – established by the European Central Bank and implemented by the BNB and five other national central banks – was designed without taking into account climate considerations (as required by EU law); is inconsistent with EU climate policy; and, undermines the bloc's emission reduction targets.

Lawyers argued that the BNB’s purchases of carbon-intensive assets issued by high emitting companies and fossil fuel majors – including Shell, Eni, EDP and Schlumberger – are illegal and direct finance to some of Europe’s worst corporate polluters.

Climate lawyer Jamie Sawyer said: “Although we are disappointed by the judgment and the narrow interpretation of the Belgian law on environmental protection, our arguments that the corporate bond purchase programme is invalid very much still stand.

“Under this policy, central banks in Europe are buying up huge volumes of carbon-intensive bonds issued by companies that are exacerbating the climate crisis, effectively subsidising heavily polluting industries.

“We maintain that the purchasing programme is invalid due to breaches of environmental and human rights laws, and that these bond purchases need to be stopped to protect our climate.”

The court deemed that ClientEarth did not meet the procedural hurdles set by that law and as a result the Belgian court did not refer a question to the ECJ on whether the purchase programme is legally valid.

ClientEarth is considering its options to continue to challenge the bond purchases, including appealing the judgment.

Sawyer added: “Following this judgment, we will be considering our options. This case was the first time a central bank had been called to defend its climate failings in court. But we are certain it won’t be the last.

“Central banks, regulators and supervisors need to ensure their actions support and do not jeopardise climate goals, otherwise they face the very real and growing risk of litigation.”


Notes to editors:
  • In April, ClientEarth filed a lawsuit against the Belgian National Bank over its implementation of the Corporate Sector Purchase Programme.
  • It asked for a question on the validity of the CSPP to be referred to the European Court of Justice.
  • The judgement was issued by the President of the French Speaking Court of the First Instance in Brussels.
About ClientEarth

ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.