Reputational pragmatism at the European Central Bank: preserving reputation(s) amidst widening climate interventions

Amidst climate change, central banks’ roles have broadened, encompassing new responsibilities beyond tradition through widening interventions. This expansion offers institutional prospects yet could entail reputational risks in reconciling long-standing and evolving responsibilities. Despite widening interventions’ reputational risks, a comprehensive understanding of how these shape banks’ behaviour – preserving existing reputations, fostering new ones, or achieving a compatible integration of both – is lacking. To obtain a better understanding of these dynamics, we draw on bureaucratic reputation theory to examine the climate engagement of the European Central Bank (ECB). Utilising a three-fold frame analysis, we examine the ECB’s communication about its greening agenda, complemented by interview data from stakeholders. Our analysis indicates that the reputation management strategy of the ECB, amidst widening interventions, encompasses the simultaneous presence of three frames – prudence, promotion, and strategic ambiguity. Leveraging the three frames, the ECB engages in reputational pragmatism to navigate diverse audience expectations, conflicting priorities, and mitigate potential reputational risks.