Recital 3

(3)Pursuant to Articles 127(1) and 282(2) of the Treaty on the Functioning of the European Union (TFEU), as reflected in Article 2 of the Statute of the ESCB, without prejudice to the objective of price stability, the Eurosystem shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union, as laid down in Article 3 of the Treaty on European Union. These objectives include a high level of protection and improvement of the quality of the environment. Regulation (EU) 2021/1119 of the European Parliament and of the Council ² (the ‘European Climate Law’) sets out a binding objective of climate neutrality in the Union by 2050 in pursuit of the long-term temperature goal set out in the Paris Agreement ³ . As the European Climate Law affects every conceivable aspect of economic policy in the Union, it forms part of the general economic policies in the Union, which the ECB is required to support. In light of the above, when adjusting its monetary policy instruments, the Governing Council will choose the configuration that best supports the general economic policies in the Union, provided that two configurations of the instrument set are equally conducive and not prejudicial to price stability. The incorporation of climate change considerations into the benchmark allocation is intended to have the effect of reducing the climate-related financial risk to the Eurosystem’s balance sheet, by reducing the carbon intensity of the Eurosystem’s corporate holdings. The measure is designed to have a neutral effect on the monetary policy stance on overall financing conditions. Given that this measure is equally conducive and not prejudicial to price stability, its introduction also serves to support the general economic policies in the Union.