Climate change and the financial sector: introducing the new ESCB analytical indicators of carbon emissions

In July 2021, the ECB Governing Council committed to including climate change considerations in its monetary policy framework. This commitment involved, amongst other deliverables, new climate-related statistical indicators. The focus of this Article is on describing the new analytical indicators of carbon emissions for financial institutions resident in Ireland. The Irish values are broadly in line with the euro area responses although the headline statistics mask considerable heterogeneity. For some of the indicators, the highly globalised nature of the Irish economy makes it difficult to establish a link between the new analytical indicators of carbon emissions and the ongoing efforts of indigenous firms to transition towards a more carbon neutral production process. More disaggregated macroeconomic data in the coming years as input into the indicators combined with separate improvements planned to the estimation of these indicators will further assist policy makers in this regard.