by Rhoda Wilson, Expose News:
The European Central Bank and the Bank of England are intensifying climate and nature-related financial regulations despite the IPCC retiring its extreme global warming scenarios and a broader retreat from ESG-focused finance.
Recently, the ECB announced it would raise interest rates on loans to companies deemed to be involved with higher carbon activities.
The ECB’s latest manoeuvre amounts to a rear-guard action by a green priesthood that senses the ground shifting but cannot bring itself to abandon the faith, Tilak Doshi writes.
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Central Banks Double Down on Climate Regulation Despite Collapse of Green Finance
By Tilak Doshi, 8 August 2026
Last weekend, as wildfires continued to scorch parts of southern Europe, Frank Elderson of the European Central Bank’s (“ECB’s”) Executive Board took to the pages of The Guardian to warn that the “climate and nature crises” now pose a direct threat to “core financial stability” and even “core price stability.” The destruction of ecosystem services, he insisted, is not some “flower-power, tree-hugging exercise” but “core economics.” The ECB, he added, is already deepening its scrutiny of banks’ exposures to nature-related risks, with further analysis due later this year.
This is the same institution that, only 10 days earlier, quietly expanded its “climate factor” in the “Eurosystem collateral framework” to cover non-financial corporate loans. From the end of 2027 at the earliest, loans to companies deemed exposed to “transition shocks” from climate change will face an additional haircut of up to 5%. The July decision and Elderson’s August rhetoric are of a piece: the ECB continues to weaponise climate (and now nature) policy even as the empirical, political and market ground shifts decisively under the alarmist camp.
From Wildfires To Collateral Haircuts
As Green Central Banking reported, the climate factor – already applied to non-financial corporate bonds since mid-2025 – will now extend to credit claims in a major expansion of its punitive scope.
The ECB frames this as mere risk management against shocks from policy changes, technology, consumer behaviour, litigation or macroeconomic adjustment. In reality, it is green industrial policy by another name: systematically raising the cost of capital for higher-carbon activities under the guise of protecting the central bank’s balance sheet.
The Bank of England has moved in parallel. In June, it excluded bonds from coal-mining companies from eligibility and announced haircut add-ons for sectors exposed to the Net Zero transition. Both institutions claim they are only addressing financial risks, not directing capital. This is casuistry. When a central bank embeds contested climate scenarios into the valuation of the assets which banks must pledge for liquidity, it ceases to be a neutral lender of last resort and becomes an agent of the climate industrial complex. It also imposes higher compliance costs on a private sector already burdened by high regulatory costs in most Western countries.
The Central Bank As Climate Enforcer
I have written at length (HERE and HERE) about the fatal combination of incompetence and overreach that occurs when central banks embrace ESG (environmental, social and governance). Mark Carney, the fêted “rock-star banker,” exemplified the trend while governor of the Bank of England and later as UN special envoy. He urged central banks to become ESG watchdogs, invoking Adam Smith’s ‘Theory of Moral Sentiments‘ to justify imposing (his) moral sentiments on capital markets. The Network for Greening the Financial System (“NGFS”), the Glasgow Financial Alliance for Net Zero (“GFANZ”) and the Net Zero Banking Alliance (“NZBA”) all flowed from this mindset and Carney’s efforts. Institutions whose narrow mandate is price and exchange rate stability via interest rates and liquidity were drafted into the planetary salvation business.
[Related: A Destructive Plan to Transform the Global Financial System Under the Guise Of “Climate Change” and Eco-Fascist Mark Carney is Trying to Control the World Through Green Finance]
The Ground Shifts, Yet The Faith Persists
The disjuncture is acute. While the NGFS is still operating, it has been severely weakened. The US Federal Reserve, FDIC (Federal Deposit Insurance Corporation), OCC (Office of the Comptroller of the Currency), Treasury and FHFA (Federal Housing Finance Agency) all withdrew in early to mid-2025, citing mission creep beyond statutory mandates. GFANZ is now heavily diluted and restructured rather than fully collapsed. In January 2025, it shifted away from requiring Net Zero commitments via sector alliances, opened broader participation and refocused on mobilising capital, especially in emerging markets. NZBA has fully collapsed. After a mass exodus of major US, Canadian, European and other banks, remaining members voted in October 2025 to cease operations.
