FRANKFURT (Reuters) -The European Central Bank is already factoring climate-related risk into the assessment of collateral used to borrow money from the bank but this rarely leads to credit rating changes, a blog post published by the ECB said on Friday.

The ECB’s 2021 climate action plan made the integration of climate risks into its collateral framework a key priority and the bank expects climate risk to be factored into credit ratings of assets posted by banks when they borrow from the central bank.

“While climate risks are widely recognised, they rarely lead to rating changes,” the blog post, which does not necessarily represent the ECB’s views, argued. “Several persistent challenges still limit the full and consistent integration of climate change risk into credit ratings.”

The ECB

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